text:
    CITY OF KALAMAZOO v. KALAMAZOO CIRCUIT JUDGE.
    1. Municipal Corporations — Ordinances — Penalty — Equity — Validity.
    Penalties provided in. a city ordinance for its violation may be so excessive as to give an equity court jurisdiction to restrain its enforcement.
    2. Same — Gas—Question of Law.
    That a gas company dealt with numerous customers and that its violations of an ordinance would be numerous, does not of itself render the penalty excessive; and since the purpose of the penalty is to secure enforcement of the ordinance, if the penalty is not excessive in each particular case, it is not excessive, as a matter of law, so as to render the ordinance void.
    3. Same — Gas Rates.
    A city is not incapacitated from fixing gas rates because it is itself a user of gas and therefore a purchaser.

      4. Same — Constitutional Law — Highways and Streets — Control of Streets — Judicial Question.
    Under section 28, art. 8, Const. 1909, providing that “the right of all cities, villages and townships to the reasonable control of their streets, alleys and public places is hereby reserved to such cities, villages and townships,” a city has the power to fix reasonable rates as a condition to the use of the streets by public utilities; the question as to the reasonableness of the condition being for the courts.
    5. Same — Public Utilities — Reasonable Condition.
    When a reasonable condition upon the use of the streets is imposed, a public utility may either accept or reject it; if it rejects, it may not occupy the streets, and if already in possession under an expired franchise it may be ousted.
    6. Same — Control of Streets — Gas Rates — Ordinances—Right to Contract — Legislative Functions.
    The power of a municipality to prescribe the rate at which gas shall be furnished to its inhabitants under its constitutional right to a reasonable control of its streets, is in the nature of a right to contract, and in its exercise it may not enforce its mandates by proceedings quasi criminal in character and penal in their nature, which is a legislative, governmental function, and, before it may be exercised, must be delegated to it in express terms or by necessary implication.
    7. Same — Kalamazoo Charter — Legislative Functions.
    The city of Kalamazoo, acting under a special charter (Act No. 475, Local Acts 1897), did not possess the power to prescribe, by an ordinance enforceable by a penalty, the rate at which gas should be furnished to its inhabitants;' such power not having been delegated to it by the legislature in its charter.
    S. Same — Home Rule Charters.
    As to the rights of municipalities operating under home rule charters, so-called, the question is not before the court and is not considered.
    Mandamus by the city of Kalamazoo to compel George V. Weimer, circuit judge of Kalamazoo county, to vacate an order dismissing an action for the violation of an ordinance.
    Submitted January 29, 1918.
    (Calendar No. 28,189.)
    Writ denied March 27, 1918.

      Marvin J. Schaberg and Harry C. Howard, for relator.

      Alfred J. Mills and John C. Weadoek, for respondent.

      Divie B. Duffield, amicus curise.

    The city of Kalamazoo, at the time of the enactment of the ordinance here involved, was acting under a special charter (Act No. 475, Local Acts 1897). On the 9th of December, 1856, the Kalamazoo Gas Light Company was incorporated under the provisions of Act No. 109, Laws 1855 (chap. 190, 2 Comp. Laws). It was reincorporated February 10, 1891, and its corporate existence extended 30 years; its successor, Kalamazoo Gas Company, was incorporated December 20, 1899, under the same act, and was succeeded by the Michigan Light Company, which was the only company producing gas in the city at the time this controversy arose. It will hereafter be called the defendant. On June 28, 1894, the Kalamazoo Gas Light Company applied to the council of the city of Kalamazoo for consent to lay mains and services in the streets of that city, and on that day an ordinance, known as Ordinance No. 121, was passed by the city council by which such consent was given. Various conditions unnecessary‘to detail were contained in this ordinance and the price of gas to consumers was fixed. This ordinance was accepted by the company. By its terms it ran “for the period of 22 years from and after the time when this ordinance shall take effect,” which was July 14,1894. It therefore expired July 14, 1916. Before its expiration the city conducted an extensive investigation into the cost of. producing gas, and on July 10, 1916, the city council passed an ordinance, known as Ordinance No. '382, and which it was provided should become effective August 1, 1916. This ordinance is very carefully drawn and fixes the rate for gas at 75 cents per thousand feet. It provides for penalties upon conviction for its violation in amounts varying from $50 to $200, and declares: ■
    “This ordinance shall not be construed in any way as a franchise, but is merely regulatory, and the city council reserves the right to alter, amend, or repeal this ordinance at any time, and to make such further rules, orders and regulations as may from time to time be deemed necessary to the city council to_ protect the interest, safety and welfare of the public, or the rights of property of the city of Kalamazoo.”
    After this ordinance by its terms took effect the defendant Michigan Light Company continued to collect from consumers its regular rates which were higher than those fixed by the last mentioned ordinance, and lower than were fixed by the ordinance of 1894. The city thereupon brought suit in the municipal justice’s court for the recovery of the penalty named in the ordinance of 1916, and, failing to there recover, took an appeal to the circuit court. There the plaintiff, filed a petition with supporting affidavits, praying for an order permitting it to examine the books and records of defendant, and defendant filed a'motion to dismiss the case on the grounds of the invalidity of the ordinance. The trial court dismissed the suit, holding the ordinance invalid. ■ The circuit judge having declined to entertain jurisdiction, we issued an order to show cause why said order dismissing the suit should not be set aside.
   Fellows, J.

(after stating the facts). Two minor objections are made to the validity of this ordinance. These we will first consider.

It is insisted that the penalties are excessive, and it is pointed out that, due to the large number of consumers with which the gas company deals, in the aggregate the sums for which the company would be liable in penalties would be enormous. This fact may be sufficient to give an equity court jurisdiction to entertain a bill filed to test its validity and to restrain enforcement of its provisions pendente lite. Smyth v. Ames, 169 U. S. 466, 517; Ex parte Young, 209 U. S. 123. But the fact that the gas company dealt with, numerous customers and that its violations of the ordinance would be numerous does not of itself render the penalty excessive. If the penalty is not excessive in each particular case it is not excessive as matter of law. The purpose of the penalty is to secure the enforcement of the ordinance and we cannot agree with counsel that the ordinance is void for excessive penalties. *

Nor are we able to follow counsel in his contention that the city of Kalamazoo was incapacitated from fixing gas rates because of the fact that the city was a user of gas, and, therefore, could not, as such purchaser, fix the price to itself and its inhabitants, as was held in Cleveland Gas Light & Coke Co. v. City of Cleveland, 71 Fed. 610, and Agua Pura Co. v. Mayor, etc., of Las Vegas, 10 N. M. 6 (50 L. R. A. 224). The decisions of the United States Supreme Court, holding the contrary doctrine, Spring Valley Water Works v. Schottler, 110 U. S. 347, 353, and Home Telephone Co. v. City of Los Angeles, 211 U. S. 265, 279, are persuasive to us that this point is not well taken. See, also, section 509, Pond on Public Utilities.

This brings us to the consideration of the main questions in the case.

Section 28, art. 8,-of the Constitution, provides:

“No person, partnership, association or corporation operating a public utility shall have the right to the use of the highways, streets, alleys or other public places of any city, village or township for wires, poles, pipes, tracks, or conduits, without the consent of the duly constituted authorities of such city, village or township; nor to transact a local business therein without first obtaining a franchise therefor from such city, village or township. The right of all cities, villages and townships to the reasonable control of their streets, alleys, and public places is hereby reserved to such cities, villages and townships.”

The last sentence of this section is the provision to which, in the main, the briefs and arguments in the final analysis are addressed, and to which we shall now give attention. The defendant insists that this provision of the Constitution does not confer upon municipalities the power to fix rates as a condition to the use of the streets by public utilities. The contention goes to the right of municipalities to fix any rate, however reasonable it may be, as a condition to the use of the streets. This contention we shall first consider, and it must be constantly borne in mind that we are now dealing with the question of affixing a condition, and not with the question of prescribing a legislative rate, to which subject we shall later refer. It will not be practical to consider all the authorities to which our attention has been challenged by counsel; they have all been carefully read, together with many others which we have examined.' We shall, however, consider sufficient of them to show the trend of decision in this and other States, and to demonstrate that the States are not in harmony on the important questions. here involved.

The holdings of the supreme courts of Missouri and Wisconsin are illustrative of the cases relied upon by defendant’s counsel. In City of St. Louis v. Telephone Co., 96 Mo. 623 (2 L. R. A. 278), the court said:

“That the company is subject to reasonable regulations prescribed by the city, as to planting its poles and stringing its wires and the like, is obvious. Such regulations have been obeyed by this defendant. Conceding all this, we are at a loss to see what this power to regulate the use of the streets has. to do with the power to fix telephone charges. The power to regulate the charges for telephone service is neither in-eluded In nor incidental to the power to regulate the use of streets, and the ordinance-cannot be upheld on any such ground.”

In State, ex rel. Wisconsin Telephone Co., v. City of Sheboygan, 111 Wis. 23, the supreme court of Wisconsin said:

“The power to regulate charges was not included in or incidental to the power to regulate the manner of using streets. There is not the remotest relation between them. The attempt of the city to justify its position on that ground must fail.”

Other cases are cited and are found sustaining this doctrine and we are urged to adopt it in the instant case. But this court has adopted a contrary doctrine, and had held, prior to the adoption of the present Constitution, that language quite similar to that here under consideration permitted the city of Detroit to attach conditions to its consent to the use of its streets by a gas company, and that as a condition it might fix reasonable rates. Boerth v. Detroit City Gas Co., 152 Mich. 657. Speaking of the right to attach such conditions, it was there said by Mr. Justice Carpenter, speaking for the court:

“It is clear, too, that it may attach conditions to its consent. What conditions? May it prescribe the rates at which gas shall be -furnished to its inhabitants? The statute does not say in express terms that it can. Is it forbidden? It certainly is not forbidden in express terms. The only language in the statute limiting the authority of the municipality is to be found in the language authorizing the municipality to prescribe reasonable regulations for the laying of the pipe. Without undertaking to definitely determine what is meant by reasonable regulations, it is quite clear that nothing but unreasonable regulations are prohibited. Authority to prescribe rates then is not prohibited unless that authority may be properly denominated unreasonable. Is it unreasonable? There is no doubt that the municipality may determine for . what length of time a gas company may use its streets for conveying gas. It had, therefore, authority — an authority exercised in this case — to determine that the gas company should use the streets for a period of 30 years, for the purpose of supplying its inhabitants with gas. Is it unreasonable for the city to prescribe the rates at which gas shall be furnished to its inhabitants? If the city cannot perscribe those rates, consumers of gas must pay whatever price the gas company asks or resort to litigation, and pay what is there determined to be reasonable. * * * As a practical proposition it may be said, then, that consumers must either pay the rates fixed by the eompány or the rates prescribed by municipal authority — in the absence, as in this case, of any action by the legislature. It may be said, then, that in order to safeguard the rights of its inhabitants who use gas, it is not only not unreasonable that the city should have the power to fix rates, but it is highly expedient — indeed, it is necessary — -that'it should possess that power. It is therefore quite clear that there is nothing in the statute which either in express terms or by proper construction prohibits the city prescribing rates at which gas shall be furnished to its inhabitants.”

We repeat that it must be borne in mind, however, that this court was there considering a rate which had been fixed by contract, not by legislative action of the city, and that it was there conceded that the city of Detroit possessed no power to fix a rate by such legislative action.

In addition to the authorities cited by Mr; Justice Carpenter, may be found the following; City of Noblesville v. Improvement Co., 157 Ind. 162, 169; City of St. Marys v. Hope Gas Co., 71 W. Va. 76 (43 L. R. A. [N. S.] 994); The Long Branch Commission v. Water Co., 70 N. J. Eq. 71; Simons Sons Co. v. Telegraph Co., 99 Md. 141, 176. In the Indiana case the court said;

“The city had the unquestionable right to grant to any person, firm or corporation a franchise to occupy its streets and alleys for conveyance of gas to customers. But it was under no compulsion to convey such right to any one. The subject of grant rested in contract like any other matter. As the price of the right the city was at perfect liberty to demand that the charges' for gas furnished the city and its inhabitants should not exceed certain prices. The appellee was at perfect liberty to reject or accept the city’s proposal. The terms proposed on the one hand and accepted on the other made a contract as valid and enforceable as if made by two individuals.”

In'the West Virginia case the court said:

“We see no reason why a town may not make a contract to accomplish a function with which it is charged or empowered, binding it and the other party. He, accepting, is plainly bound, and cannot say the town’s act is void.”

In the Maryland case the court had under consideration a legislative ordinance, but, speaking of the control over the streets of the city, said:

“It would seem to be but a reasonable incident to, and exercise of, the power to regulate the use of the streets and highways which has been conferred by the provision of law we are here considering, that, where a public service corporation gets permission to use such streets and highways for its corporate purposes, and such purposes consist in making contracts with the citizens of the municipality to which the power is entrusted, and exacting from them compensation for a service that for urgent reasons of convenience or the necessities of business conditions they must avail of, the permission can be granted under such regulations as to rates of charges as will protect the community against extortionate exactions and secure fair and reasonable terms in availing of the facilities which the corporation furnishes.”

It seems, therefore, clearly admissible, under the language of the Constitution here under consideration, that the municipalities of the State having “reasonable control of their streets,” may affix reasonable conditions for their use by public utilities, and that, among such reasonable conditions, is the fixing of a reasonable rate. That such conditions must be reasonable, the language of the Constitution clearly demonstrates. People v. McGraw, 184 Mich. 233, and that the courts may determine the question of whether conditions imposed are reasonable or not, this court has determined. Michigan Telephone Co. v. City of St. Joseph, 121 Mich. 502. Municipalities may not act arbitrarily or captiously, but when a reasonable condition upon the usé of the street is imposed the public utility is at liberty to accept or reject it. If it rejects, it may not occupy the streets, and if already in possession under an expired, franchise it may be ousted. Detroit United Ry. v. City of Detroit, 229 U. S. 39. May we not assume that the Constitutional Convention had the holding of this court in the Boerth Case in view when this provision was framed ?

We have thus far considered the administrative power of municipalities, their power to contract, to fix reasonable conditions. We now pass to their power to legislate. .These two powers are of entirely different character. The one of a proprietary nature, the other governmental in its character. The one permitting agreements, the other controlling action; the one private, the other public. It is said in 1 Dillon on Municipal Corporations (5th Ed.), § 109:

“In its governmental or public character, the corporation is made, by the State, one of its instruments, or the local depositary of certain limited and prescribed political powers, to be exercised for the public good on behalf of the State rather than for itself. In this respect it is assimilated, in its nature and functions, to a county corporation, which, as we have seen, is purely part of the governmental machinery of the sovereignty which creates it. Over all its civil, political, or governmental powers, the authority of the legislature is, in the nature of things, supreme and without limitation, unless the limitation is found in the Constitution of the particular State. But in its pro prietary or private character, the theory is that the powers are supposed not to be conferred, primarily or chiefly, from considerations connected with the , government of the State at large, but for the private advantage of the compact community which is incorporated as a distinct legal personality or corporate individual; and as to such powers, and to property acquired thereunder, ‘and contracts made with reference thereto, the corporation is to be regarded quo ad hoc as .a private corporation, or at least not public in the sense that the power of the legislature over it or the rights represented by it, is omnipotent.”

Judge Sanborn, speaking for the circuit court of appeals for the eighth circuit, in the case of Illinois Trust & Savings Bank v. City of Arkansas City, 76 Fed. 271, said:

“A city has two classes of powers — the one legislative, public, governmental, in the exercise of which it is a sovereignty and governs its people; the other, proprietary, quasi private, conferred upon it, not for the purpose of governing its people, but for the private advantage of the inhabitants of the city and of the city itself as a legal personality. In the exercise of the powers of the former class it is governed by the rule here invoked. In their exercise it is ruling its people and is bound to transmit its powers of government to its successive sets of officers unimpaired. But in the exercise of the powers of the latter class it is controlled by no such rule, because it is acting and contracting for the private benefit of itself and its inhabitants, and it may exercise the business powers conferred upon it in the same way, and in their exercise it is to be governed by the same rules that govern a private individual or corporation.”

And a large number of authorities are cited. ' See, also, the quotation from the case of City of Indianapolis v. Gas-Light & Coke Co., 66 Ind. 396, found in Mr. Justice Carpenter's opinion in the Boerth Case; Safety Insulated Wire & Cable Co. v. Mayor, etc., of Baltimore, 66 Fed. 140. It is evident, therefore, that in the exercise of the administrative power the municipality may contract, and may .reasonably refuse the use of public property in which its interest is proprietary, but it may not inflict penalties for an invasion of its proprietary rights; while in the exercise of its legislative, governmental functions it may enforce its mandates by proceedings quasi criminal in character and penal in their, nature.

It cannot be doubted'that where the owner of property devotes it to a use in which the public has an interest he* submits it to the extent of that interest to public control, and where the property is devoted to a public use and is charged with such public interest the State, in the interest of the public, may prescribe reasonable rates for- such public use. Munn v. Illinois, 94 U. S. 113. But, except by contract, the fixing of rates is a governmental legislative function. Pond on Public Utilities, § 419; 3 Dillon on Municipal Corporations (5th Ed.), § 1325; Home Telephone Co. v City of Los Angeles, 211 U. S. 265. It may be delegated to the municipality. Home Telephone Co. v. City of Los Angeles, 155 Fed. 554, and authorities hereinafter considered.

The exercise of this governmental legislative function, this attribute of sovereignty, must be delegated in express terms or by necessary implication. 20 Cyc. p. 1166, lays down the rule in the following language:

“In the absence , of charter authority or other statutory or constitutional provisions delegating the power in express terms or by necessary implication, it is the rule that a municipal corporation has no power to fix by ordinance the price at which a gas company shall supply its consuméis.”

This language was adopted in City of Richmond v. Natural Gas Co., 168 Ind. 82 (11 Am. & Eng. Ann. Cas. 746).

In Omaha Electric Light & Power Co. v. City of Omaha, 179 Fed. 455, it was said:

“Legislative grants of power to municipal corporations must be strictly construed, and cannot operate as a surrender of legislative power, except so far as expressly delegated or is indispensably necessary to the exercise of some other power which has been expressly delegated.”

In Mills v. City of Chicago, 127 Fed. 731, the court says:

“A municipal corporation possesses only such power as is granted by the legislature in express words, or such as is fairly implied from power expressly granted, or is essential to the specific object and purposes of municipal existence. No one has pretended that the regulation of the price of gas is essential to the specific object for which the city of Chicago was created ; hence that source of possible power may be dismissed without further discussion.”

See, also, Water, Light & Gas Co. v. City of Hutchinson, 207 U. S. 385; Minneapolis General Electric Co. v. City of Minneapolis, 194 Fed. 215; Wabaska Electric Co. v. City of Wymore, 60 Neb. 199.

We are unable to find any provision of the charter of the city of Kalamazoo delegating the governmental power to the city to fix rates for gas used by consumers, either expressly or by necessary implication; nor has any such provision been called to our attention. But counsel for the city most strenuously urge that governmental power is conferred by the language of the Constitution above quoted. With this contention we cannot agree. Upon principle the question is ruled by City of Detroit v. Detroit United Ry., 172 Mich. 136, a case determined since the adoption of the present Constitution. This court there held that a public utility corporation whose franchise to occupy the street had expired was a continuing trespasser, and, upon reasonable notice, could be required to remove its property from such streets, but that the city could not, by its own mandate, fix a fee for the use of such streets and enforce its collection.

In the case of Bluefield Water Works & Improvement Co. v. City of Bluefield, 69 W. Va. 1 (38 L. R. A. [N. S.] 759), the court said:

“This corporation, chartered by the State, could not obtain the right to occupy the street^ of the city or do business therein under its State franchise, without the consent of the city. In order to obtain that consent, it was bound to submit itself to such regulatory conditions as the city saw fit to impose.”

But the court further said:

“The regulation of rates for public service belongs to the police power of the State. Coal & Coke R. Co. v. Conley, 67 W. Va. 129. The. State has very ample powers for the control and government of corporations and the transaction of their business, and may no doubt ordain and enforce such regulative measures as are embodied in the ordinance complained of, and enforce compliance therewith by making failure to observe them a criminal offense, punishable by fine. But municipal corporations do not possess all the police powers of the State. They have only such portions thereof as are granted to them by the legislature in express terms or by necessary implication.”

And it was held that the rates fixed might not be enforced through the penalty provided in the ordinance. This case sustains the doctrine that while the city in the exercise of control over the use of its streets may impose conditions, it. may not, by virtue of that power, enact an ordinance fixing rates to be enforced by penalties.

That the want of power to legislatively fix a rate does not prevent the execution of a contract, is illustrated by the case of City of Noblesville v. Improvement Co., supra, where it is said:

“That the city had no power to regulate the rates of its licensee makes no difference. It had the power to contract. And the power to regulate as a governmental function, and the power to contract for the same end, are quite different things. One requires the consent only of the one body, the other the consent of two. In this instance the city acted in the exercise of its power to contract, and it is therefore entitled to the benefits of its bargain.”

In City of St. Mary's v. Hope Gas Co., supra, it was held that the city might, in the control of the use of its streets, prescribe conditions including the fixing of rates for gas, and might contract therefor, even though it possessed no governmental power to fix rates.

The distinction between fixing rates by contract and under governmental power was clearly recognized by the Supreme Court of the United States in the case of City of Detroit v. Railway Co., 184 U. S. 368, where it was said:

“It is plain that the legislature regarded the fixing of the rate of fare over these street railways as a subject for agreement between the parties and not as an exercise of a governmental function of a legislative character by the city authorities under a delegated power from the legislature.”

Much reliance is placed on the case of Home Telephone Co. v. City of Los Angeles, supra, and it is thought that the court there held a doctrine sustaining the city in its contention here and contrary to our conclusion. The opinion of the trial court in that case is an able and exhaustive one; but a critical examination of that case, in both the trial court and in the Supreme Court of the United States, together with the statutes of the State of California, demonstrates that the legislature of that State, by an act known as the “Broughton Act” (Stats, of 1901, p. 265), had expressly delegated to municipalities the power to dispose of franchises, and that the manner so provided by the legislature had . been followed by the city of Los Angeles. The city in that case was exercising an expressly delegated power and the case is in harmony with our conclusion, rather than opposed to it.

The ordinance in question is legislative in character, so declared to be by its terms, and is so by its provisions. The city did not possess the power to enact it as a legislative, governmental measure, to be enforced by a proceeding penal in its nature, either by virtue of any power delegated to it in its charter or by force of the provision of the Constitution under consideration.

We have not before us, and do not pass upon, the question as to what rights, municipalities may have under home rule charters, so-called; the city of Kalamazoo was here acting under a legislative charter.

The earnestness of counsel for plaintiff in their in-r sistence that the construction claimed by them is the one indulged in by the framers of the present Constitution has prompted us to read the entire debates, of the constitutional convention on this, provision, and they cover many pages. The subject was. considered on several occasions. We are unable to find the suggestion in these debates that this provision was designed to deprive the State of its governmental power to fix rates.

We are favored in the briefs of the respective parties with a discussion of the merits of two plans of delegating the power to fix rates for public utilities, one to-a State public utility commission having general jurisdiction over all public utilities, the other direct to municipalities over those of local interest. We cannot determine this controversy. That is for the legislature. Both plans were submitted to the last session of the legislature (H. B. No. 7; File No. 11; S. B. No. 246, File No. 204; S. B. 247, File No. 205) and both failed of passage.

It follows that the writ of mandamus must be denied. As the question is a public one, no costs will be allowed.

Bird, Moore, Steere, Brooke, and Stone, JJ., concurred. Ostrander, C. J., and Kuhn, J., did not sit.


source: Caselaw Access Project

author: Fellows, J.

license: Public Domain

text:
    BOUDEMAN v. ARNOLD.
    1. Trial — Evidence—Directed Verdict.
    Where the testimony is all one way, is uncontradicted by. any testimony given in the case by the witnesses of either party, either on direct or cross-examination, or by any facts or circumstances in the ease, is not in itself in any way improbable or discredited, and but one legitimate inference may be drawn from it, and a case is thereby made for the plaintiff or a defense made for the defendant, the duty rests upon the court to direct a verdict.
    2. Same.
    That it is many times a difficult question to determine whether there is any testimony on a given subject, does not relieve the court from the responsibility or the duty of solving it.
    3. Sales — Conditional Sales — Retaining Title.
    Title to personal property may be retained by parol in the vendor for security until paid for, even though a note is given to evidence the indebtedness; and the vendor may sue upon the note without losing his security.
    4. Trover and Conversion — Conditional Sales — Evidence — Directed Verdict.
    In an action for the conversion of a marine engine, placed in a boat on which defendant had a chattel mortgage, after the giving of the mortgage, which did not cover after-acquired property, where plaintiff’s demand for the engine was refused although it could have been removed without damage to the boat, and defendant sold and bid in the boat and engine, and the testimony is undisputed that title to the latter was retained in plaintiff, a verdict for plaintiff was properly directed by the court below.
    Error to Berrien; Bridgman, J.
    Submitted January 8, 1918.
    (Docket No. 2.)
    Decided March 27, 1918.
    Case by Dallas Boudeman, Jr., against Lester L. Arnold for the conversion of an engine. Judgment for plaintiff on a directed verdict. Defendant brings error.
    Affirmed.

      O’Hara & O’Hara, for appellant.

      Gore & Harvey (Dallas Boudeman, of counsel), for appellee.
   Fellows, J.

Prior to February 21, 1914, defendant was the owner of four passenger boats on Paw Paw Lake in Berrien county; one of these boats Was named “Dixie”. On this date he sold this line of boats to one Alpha Cross, taking as part payment certain real estate at an agreed price of $685, and receiving for the balance four promissory notes of $528.75 each, secured by a chattel mortgage on the boats; this chattel mortgage did not cover after-acquired property. Cross, after the purchase of the boats, made an arrangement with Harry W. Shively and a Mr. Corsett for the joint operation by the three of this line of boats during the season of 1914. Shively and Corsett were to and did put in five or six hundred dollars which was used to repair the boats and put them in shape for operation. The engine in the “Dixie” proved unsatisfactory and Shively saw plaintiff, a manufacturer of marine engines, with a view of purchasing one of his engines for use in the “Dixie”. Both Shively and plaintiff testify to the arrangement made, which was that the engine should be tried out to see if it proved satisfactory, that title thereto should remain in plaintiff until paid for, and that a note was to be and was given as evidence of the indebtedness in case any of them should die. There was no testimony given to the contrary. The engine was shipped to Paw Paw Lake, put in the boat “Dixie” and worked satisfactorily. Shortly before the first note given by Cross to defendant fell due, defendant took possession of the boat “Dixie” and proceeded to advertise the same for sale under the terms of the mortgage. Plaintiff demanded the engine which the testimony shows could have been removed without damage to the boat, but the demand was refused and the boat with the engine installed was sold and bid in by defendant. This action was brought for the conversion of the engine. Upon the trial and here defendant conceded that title might be retained in personal property by parol, but insisted that it was a question for the jury in the instant case whether it was so retained. The trial court was of the opinion that plaintiff’s case was made out by uncontroverted evidence, that there was no evidence to dispute it, and directed a verdict for the plaintiff for the value of the engine.

The defendant insists, and it is the only question in the case, that the.court should have submitted the case to the jury.

The functions of judge and jury are too well under- ■ stood to require extended discussion. The jury finds the facts, the judge decides the law. The jury weighs the evidence, the judge determines the legal questions. The credibility, sufficiency and weight of the evidence on a given subject are for the jury; the question of whether there is any evidence on a given subject is for the court Where the testimony is all one way, is uncontradicted by any testimony given in the case, either from a party’s own witnesses, or the other party’s witnesses, either on direct or drawn out on cross-examination, or by any facts or circumstances in the case, is not in itself in' any way improbable or discredited, and but one legitimate inference may be drawn from it, and a case is thereby made for the plaintiff or a defense made for the defendant, the duty rests upon the court to direct a verdict. Mynning v. Railroad Co., 64 Mich. 93; Hunt v. Order of Chosen Friends, 64 Mich. 671; McGrath v. Railroad Co., 57 Mich. 555; Peninsular Stove Co. v. Osmun, 73 Mich. 570; Brudin v. Inglis, 121 Mich. 410; Hicks v. Steel, 126 Mich. 408; Nester v. Township of Baraga, 133 Mich. 640. That it is many times a difficult question to determine whether there is any testimony on a given subject, does not relieve the court from the responsibility or the duty of solving it.

In the instant case the testimony of plaintiff and Mr. Shively, a disinterested witness, agree as to what the arrangement was with reference to the e,ngine; that title was retained in plaintiff until it was paid for, and that the note was given to evidence the indebtedness. We are unable to find anything in the cross-examination of either of them, any testimony by other witnesses, or any fact or circumstance in the case which in any way tends to discredit or controvert the facts testified to by them.

Under their undisputed testimony that title was retained in plaintiff, the circunlstances surrounding their negotiations, their highly probable and in no way discredited testimony that the note was given solely to evidence the indebtedness, the fact that a note was given did not make a case for the jury. Title may be retained for security even though a note is given to evidence the indebtedness, and the vendor may sue upon the note without losing his security. Holcomb & Hoke Manfg. Co. v. Cataldo, 199 Mich. 265; Atkinson v. Japink, 186 Mich. 335.

Nor was a case made for the jury by the unsupported but often repeated claim of defendant’s counsel, that the testimony of these witnesses was not truthful, and their version of the transaction was not true. If the unsupported claims of counsel would take a case to the jury there would be few cases that juries would not ■be given an opportunity to speculate upon. There was no error in refusing to submit this case to the jury and the judgment is affirmed.

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


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    BARKER v. FINLEY.
    1. Equity — Appeal and Error — De Novo.
    Gn appeal in equity proceedings, the appellate court considers the case de novo, and where, after considering all the advantages of the trial judge, and the presumptions arising from the personal touch he had with the case, it is satisfied that an incorrect result has been reached, whether as a matter of law or fact, its duty to reverse the court below is clear.
    2. Evidence — Fraud—Promises—Contracts.
    A promise made in bad faith, with no intent to carry it out, and as a part of a scheme to defraud, may be received in evidence because it is connected with representations of fact, and its nonperformance may be proven; but, standing alone, statements promissory in their character are contractual in their nature and do not constitute fraud.
    3. Specific Performance —- Land Contracts — Consideration — Evidence — Equity.
    On a bill by the vendees for the specific performance of a land contract for the sale of a house and lot, where the evidence is undisputed that a $1,000 payment, credited on the contract at the date of the making, was never paid, and, as claimed by plaintiffs, was never intended to be paid, but which defendant claims was credited with the understanding that plaintiffs’ father would pay it inside of two weeks; evidence as to the conflicting claims examined, and held, to preponderate in favor of plaintiffs and to require reversal of the decree for defendant in the court below.
    Appeal from Calhoun; North, J.
    Submitted January 25, 1918.
    (Docket No. 107.)
    Decided March 27, 1918.
    Bill by Shirley T. Barker and another against Agnes W. Finley for the specific performance of a land contract. Defendant filed an answer in the nature of a cross-bill asking for a reformation of the contract. From a decree dismissing the bill and granting the prayer of the cross-bill, plaintiffs appeal.
    Reversed, and decree entered for plaintiffs.

      Verner W. Main (George W. Mechem, of counsel), for plaintiffs.

      Stewart & Jacobs, for defendant.
   Fellows, J.

In the spring of 1910, Martin V. Barker and his wife, Harriet, tfie father and mother of plaintiffs, were occupying a house in the city of Battle Creek owned by one Lycurgus McCoy, spoken of in the record and briefs as Elder McCoy. Of their children, three at least were of age, Lincoln, Lulu, and Shirley. Lincoln was then a teacher in the high school at Battle Creek, Lulu was a nurse, and Shirley was attending college at Olivet. Mr, McCoy at that time owned two houses, the one then occupied by the Barkers, the other, the premises in question. He desired to remodel the one occupied by them for his own use, and to dispose of the other one. The facts preceding the execu- . tion of the papers are in dispute, but the documentary evidence shows that on May 28, 1910, Mr. McCoy executed to defendant a deed of the premises, and on May 25th she entered into a contract with Lincoln, Lulu, and Shirley Barker to sell them the premises on monthly payments. Later, and before the filing of this bill, Lincoln assigned his interest in this contract to his brother and sister. Early in the life of the contract the monthly payments were promptly made; later, not so promptly, but forfeiture was not declared. Mr. McCoy sold the premises to defendant for $4,000. The land contract recited $5,000 as the purchase price and payment of $1,000' was acknowledged therein by the defendant. Shortly before filing this bill plaintiffs made arrangements to pay the balance due on this contract and requested a statement of the amount due. A computation was furnished to which we shall refer later, and shortly thereafter they were informed of defendant’s claim that she should insist on the payment of the $1,000 mentioned in the contract but which had not actually been paid. We are satisfied that this is the first information they had that defendant claimed the purchase price was actually $5,000, and that they owed $1,000 in addition to the amount provided for in the contract. They tendered the amount due on the contract according to its terms, and, upon its refusal, filed this bill for specific-performance. Defendant answered and by way of cross-bill asked to reform the contract by striking out the acknowledgment of the receipt of the thousand dollars, on the grounds of fraud. The trial court dismissed the bill and granted defendant the relief prayed. Plaintiffs appeal.

We recognize, as contended by defendant, that the trial judge had the opportunity of seeing the witnesses, of noting their appearance on the stand, their candor, or want of candor, and that his conclusions as to the facts should be given due weight. No doubt this should be taken into consideration by the appellate court; büt this court is considering the case de novo, and where, after considering all the advantages of the trial judge, and the presumptions arising from the personal touch he had with the case, we are satisfied that an incorrect result has been reached, whether as matter of law or of fact, our duty is clear.

In the instant case the preliminary question of fact is not in dispute. Both sides agree that the thousand dollars acknowledged down payment was not in fact paid. Plaintiffs contend that no other purchase price than $4,000, the price Mr. McCoy sold the place for, was ever considered or discussed by the parties; that defendant contemplated going to California and considered a contract more salable with a substantial down payment acknowledged, and that it would also aid them if they desired to sell the premises, and for these reasons the contract contained the provision it did. They deny that they authorized their father to act as their agent in the transaction, and insist that if there was any arrangement for a larger consideration than $4,000 it was without their authority, knowledge or consent. Defendant, on the other hand, contends that she bought this property for a speculation; that Martin V. Barker acted as agent for his children, and that he procured her to execute the contract containing the acknowledgment of payment through his fraudulent promise to, himself, pay the thousand dollars within a couple of weeks. This presents the controlling question in the case and around it the evidence, direct and circumstantial, revolves.

Mr. Barker appears to have possessed som,e of the traits, of Dickens’ famous character of Macawber; he appears to have been visionary, attempting various promotions, always expecting them to be successful, always looking for something to turn up, ready to borrow money; never realizing his ambitions, never successful, never discharging his obligations so far as defendant was concerned. At the time of this transaction she held a mortgage on the farm, which stood in Mrs. Barker’s name, of $2,000 and unsecured obligations of Mr. Barker of over $2,000 more, all of which was long past due. Defendant in her testimony claims to have then had unbounded confidence in Mr., Barker, and to have accepted his unsecured promise, to pay $1,000 in a couple of weeks’ time, tier case on her cross-bill is sustained by her own testimony, and some inferences that are in the case, but which are not in any way conclusive, as we view the case. On the other hand, plaintiffs’ testimony is strongly corroborated by members of the family and .by disinterested witnesses, who, so far as the record discloses, are absolutely unbiased.

Elder McCoy, who sold the property to defendant, and who had many conversations with her about its sale to the Barker children, was called as a witness for the plaintiffs. Under the circumstances of the case his testimony is of unusual importance. On direct examination he testified:

“Q. Did she tell you what she was selling to the Barkers for? What price?
“A. Why, I understood it was the same price that she paid me.
“Q. What was that price?
“A. $4,000.”

Upon cross-examination he says:

“The question that particularly concerned Mrs. Finley that she came to talk with me about was if it would be advisable to sell to these parties, as they had no amount of money to pay down on the property, and it was stringing it out a long time, so she hesitated some time upon that question as to their ability or the advisability of selling to them on such a length of time. * * * I never heard that there was any • dispute as to the consideration or any contention as to the matter, until this suit was brought.”

In reply to a question by the court, he said:

“At the same time, Mrs. Finley seemed quite desirous of helping the family, and assisting them in any way she could, providing she was perfectly secure; her money would be out at interest and she would rely on it.”

And upon re-examination he testified:

“Yes, she expressed herself as having sympathy for Mrs. Barker, that they had an interesting family and they now had a prospect or hoped to have a permanent home; they had been living in rented property •for a long time and she said, ‘Now you may think it is a foolish thing to do to sell them the property and give them a long time to pay for it, but I will be glad to do it if it can be safely done. I am willing to trust them for it.’ I told her I thought it would be an advisable thing to do; I had confidence in the children that they would be active and industrious in making the payments.”

This witness also testifies that in these conversations the defendant told him of Martin V. Barkers past-due obligations, her unsatisfactory dealings with him, and expressed herself freely that she did not think he would or could meet his contracts.

Mrs. Rowell, a confidential friend of defendant, gave testimony that defendant told her of this sale to the Barker children; that in the early conversations she stated the consideration to be $4,000, but in the later conversations had claimed an additional $1,000. She testified:

“In the early conversation she gave me to understand that — and so stated — it was $4,000. * * * In those former conversations, she did not say anything about the real consideration being more than $4,000. She made the statement to me that she thought she had sold the property too cheaply. During all of these former conversations she told me the purchase price was $4,000. She told me that she considered that too cheap. The time when she first spoke about the claimed $1,000 was less than 6 months ago. I couldn’t just say how long it is. It was recently.”

Plaintiffs’ mother corroborated their claim, and Lincoln, who had assigned his interest in the contract to them and who therefore had.no pecuniary interest in the case, testified unequivocally that the contract price was $4,000; that she stated that her dealings with his father had been unsatisfactory, that the children were more practical than he was, that she considered him very impractical and regretted that his mother at her age was not settled in a home where she could stay. Of this witness the court in his opinion said:

“I feel it my duty to place in the record in this case that Lincoln Barker, who appeared as a witness for the plaintiffs impressed me as being an honest and conscientious witness.”

But concluded that he was mistaken as to having had the conversations with defendant he testified he did have. All of this testimony was flatly contradicted by the defendant.

We have referred to a computation of the amount due on this contract obtained from defendant by plaintiffs prior to filing this bill. This computation was figured in accordance with the terms of the contract and did not include as due or owing the thousand dollars in controversy. The failure to include this sum is a significant fact and is explained by defendant with some plausibility. It is also significant that while defendant is now asking a reformation of the contract so . as to collect the thousand dollars from these plaintiffs and out of this property, she stated to the man who made the computation that she was looking to Martin V. Barker for this sum.

A promise made in bad faith, with no intent to carry it out, and as a part of a scheme to defraud, may be received in evidence because it is connected with representations of fact, and its nonperformance may be proven. McDonald v. Smith, 139 Mich. 211, 218; but, standing alone, statements promissory in their character are contractual in their nature and do not constitute fraud. Boston Piano & Music Co. v. Pontiac Clothing Co., 199 Mich. 141, and cases there cited. We doubt upon this record that we would be justified in finding that if Mr. Barker did make any promise to defendant to pay $1,000, it was made in bad faith, or that she relied upon it.

For over six years these plaintiffs have been making payments on this contract and have paid taxes, insurance, and repairs, with no notice or claim on the part of defendant that there was $1,000 more due on the contract than it showed upon its face. It was but. shortly before this bill was filed that they had any knowledge of such claim. One defrauded must act promptly on discovering the fraud. If we should treat Mr. Barker’s unfulfilled promise as a fraud, and concede all defendant claims for it, both as matter of fact and of law, still defendant knew within two weeks from the execution of the contract that it was not carried out, and for over six years she accepted payments and gave no notice to the plaintiffs of her claim that she had been defrauded, took no steps to have the contract reformed until'.brought into court as a defendant in a bill for specific performance. Equity requires vigilance, some degree of promptness upon the part of those claiming to have been defrauded; and especially is this true where innocent parties are dealing and assuming positions in reliance upon the validity of contracts. 1

The' evidence in this case strongly preponderates in favor .of' the plaintiffs and the claim they assert. We are convinced that defendant purchased these premises of Mr. McCoy for the purpose of a resale to the Barker children; that she was prompted to do this by her kindly feelings, rather than a desire to speculate; that she was then satisfied with seven per cent, interest on the money invested; that, being assured the return of her money with interest, she was willing to assist these children in securing a home for their mother and themselves.

It follows that the decree of the court below must be reversed and one here entered in conformity with the prayer of the bill. Plaintiffs will recover costs of both courts.

Ostrander, C. J., and Bird, Moore, Steere, Brooke, and Stone, JJ., concurred. Kuhn, J., did not sit.


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    BROWN v. CENTRAL WEST COAL CO.
    Master and Servant — Workmen’s Compensation Law — Death: 03? Employee — Compensation—Basis oe Award.
    Where the undisputed testimony showed that, after a workman had served his employer for several years in the capacity of a locomotive' crane operator, he left its employ on June 21, 1916, going out on a strike, and on August 24, 1916, he re-entered its service in the capacity of a mechanic, under a new contract and at a' different wage, in which capacity he was serving at the time of his accidental death, on October 1,1916, the compensation awarded by the industrial accident board under the workmen’s compensation law, was properly based upon his average daily wage during the time of his second employment, he not having worked in this employment “during substantially the whole of the year immediately preceding his injury.” Act No. 10, Extra Session 1912, part 2, § 11 (2 Comp. Laws ' 1915, § 5441).
    Certiorari to the Industrial Accident Board.
    Submitted January 11, 1918.
    (Docket No. 52.)
    Decided March 27, 1918.
    Kate Brown presented her claim for compensation against the Central West Coal Company for the accidental death of her husband in defendant’s employ. From an order awarding compensation, defendant and the Fidelity & Casualty Company, insurer, bring certiorari.
    Affirmed.

      Guy W. Moore and Hal P. Wilson, for appellants.

      Doyle & Barstow, for appellee.
    The facts in this case are not in dispute. Liability is admitted. The sole litigated question is the amount of compensation to be paid. For several years prior to-June 21, 1916, plaintiff’s husband, the decedent, was continuously in the employ of defendant coal company as a locomotive crane operator. His average weekly wage during this period was $17.59. On that day decedent and other employees of the company went out on a strike. On August 24, 1916, he again entered the service of the company; this time as a mechanic. On October 1st, he met his death from an accident arising out of and in the course of his employment; his average weekly wage for the period from August 24th until his death was $20.14. The board awarded to plaintiff $10 per week for a period of 300 weeks. If the board was. correct in computing the compensation on the basis of his average daily wage from August 24th to October 1st, the award should be affirmed, if not, it should be reduced to $8.79 per week. We quote briefly from the testimony of the secretary and treasurer of defendant coal company :

      “Q. Mr. Gram, how do you denominate the character of service he was given. What name is given to his work?

      “A. Mr. Brown is what we call a locomotive crane operator. Up to the time of the strike he held that position.

      “Q. Did he go back to the same position after the strike?

      “A. He took the position of mechanic at the rate of $90 per month.

      “Q. And up to that time he was paid by the hour?

      “A. Yes. * * *

      “Q. When the men went back did they go back to the same places they left?

      “A. I didn’t say they got the same places; they went back regardless of what they did before.”
   Fellows, J.

(after stating the facts). The section, of the employer’s liability act involved in this case is part 2, § 11 (2 Comp. Laws 1915, § 5441). In the case of Andrejwski v. Wolverine Coal Co., 182 Mich. 298, this court had this section under consideration. Speaking through Chief Justice McAlvay, it was there said:

“By section 11 of part 2 of this act the legislature specifically provided the manner in which the average annual earnings of each employee should be determined by making four classifications, under one of which every case to be considered and determined under this statute must fall. Attention will now be given to these classifications, quoting and construing them in the order in which they appear in this section: * * * ,
“Second. ‘If the injured employee has not worked in the employment in which he was working' at the time of the accident, whether for the employer or not, during substantially the whole of the year immediately preceding his injury, his average annual earnings shall consist of three hundred times the average daily wage or salary which he has earned in such employment during the days when so employed’.
“This class is intended to include those cases where an employee who has not worked in the employment in which he was engaged at the time of his injury, whether for the same employer or not, during substantially the whole of the year immediately preceding his injury, where his daily wage or salary earned is fixed and known. In such case his average annual earnings will be 300 times such average daily wage or salary earned in such employment during the days when so employed.”

In the case of Robbins v. Engine Co., 191 Mich. 122, this court, speaking through Mr. Justice Ostrander, said:

“A man may change his employment or the capacity in which he follows it. If he has done so at a time substantially less than a year before his injury then the statute fixes 300 times his daily wages-as his average annual wages.”

When the decedent, a locomotive crane operator, left the employ of the coal company on the occasion of a strike, June 21st, the relations of master and servant, of employer and employee, were at an end. It required a new contract, a new employment, to restore such relations. When he entered the service of the coal company as a mechanic on August 24th, it was under a new contract, a new employment; in a different capacity, at a different wage. It was in this new capacity, this new employment, that he was working when he met his death. He had not worked in this eim ployment “during substantially the whole of the year immediately preceding his injury.” In fact, he had so worked but a short time. It is clear, therefore, that the decedent belonged to the second class mentioned in the Andrejwski Case, and that compensation should be computed upon the basis of his average daily wage during the days when he was so employed. It was upon this basis that the award was made by the industrial accident board and such award is affirmed.

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


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    GRAY v. BROWN & SEHLER CO.
    Master and Servant — Workmen’s Compensation Law — Action at Law — Election of Remedies — Release.
    Where the widow of a deceased employee filed a claim under the workmen’s compensation act with the employer, who was subject to its provisions, such action operated as a re-' lease of the employer from all claims and demands at law (section 1, part 6, Act No. 10, Extra Session 1912, 2 Comp. Laws 1915, § 5488), and where an action was brought, based on the 'employer’s common-law liability, the court below properly directed a verdict for the defendant.
    Error to Kent ;• Brown, J.
    Submitted January 31, 1918.
    (Docket No. 183.)
    Decided March 27, 1918.

      Case by Thomas Gray, administrator of the estate of Morton B. Jameson, deceased, against Brown & Sehler Company for the negligent killing of plaintiffs intestate. Judgment for defendant on a directed verdict. Plaintiff brings error.
    Affirmed.

      Maynard, Freeland & Munshaw, for appellant.

      Boland J. Cleland (Earl F. Phelps, of counsel), for appellee.
   Fellows, J.

This action at law is brought under the “Death Act” to recover damages for the negligent killing of a workman who met his death by the falling of the walls of defendant’s plant, which had been destroyed by fire. The same accident occasioned the case of Opitz v. Hoertz, 194 Mich. 626, which came to this court on certiorari to the industrial accident board. In that case the question of liability for compensation was not disputed, the contested question being which defendant was liable. In the instant case plaintiff seeks to recover damages under a declaration counting on defendant’s negligence. At the close of the case defendant moved for a directed verdict upon three grounds, which, briefly stated, were:

(1) The parties were operating under the workmen’s compensation law and proceedings must be had under that law.

(2) Decedent’s widow and dependent had filed claim for compensation under that act, which fact barred an action at law and required that compensation be received under its provisions.

(8) The proof did not show instantaneous death.

The court directed a verdict on the first of these grounds.

We find it unnecessary to discuss the reasons given by the learned circuit judge for his action as we are clearly of opinion that defendant must prevail on the second ground of the motion. After bringing this suit the widow and dependent, by her attorneys, filed with the industrial accident board and served on defendant, a formal claim for compensation under the provisions of Act No. 10, Extra Session 1912 (2 Comp. Laws 1915, § 5428 et seq.). There is no claim that any mistake as to her remedy caused her to do this. It was done by her attorney, and we must assume it was deliberately done; it is dated but a few days before the six months’ limit of the statute had expired.

Upon the trial defendant admitted its liability under the act and offered to pay compensation according to its provisions. We therefore have this situation presented: The dependent deliberately makes claim for compensation under the terms of the workmen’s compensation act; the employer admits liability. The act itself provides, section 1, part 6 (2 Comp. Laws 1915, § 5488) :

“If the employee, or his dependents, in case of his death, of any employer subject to the provisions of this act files any claim with, or accepts any payment from such employer, or any insurance company carrying such risks, or from the commissioner of insurance on account of personal injury, or makes any agreement, or submits any question to arbitration under this act, such action shall constitute a release to such employer of all claims or demands at law, if any, arising from such injury.”

This section makes the filing of a claim a “release” of “all claims and demands at law,” and is one of the essential features of the acf This court and other courts of last resort have so frequently commented on the purposes of this act and similar legislation in other States, that it is unnecessary to here repeat what has so often been said, further than to say, that among its purposes was the elimination of expense and delays growing out of litigation between employees and employers, a purpose which could be easily frustrated by permitting employees to bring litigation based upon common law liability,- while at the same time holding fast to the statutory right to compensation. .This the legislature clearly sought to prevent by this section. It is patent that the legislature contemplated that parties should not be permitted to play fast and loose with this meritorious legislation; that the legislature clearly had this in mind when this provision was incorporated in the act. The language is clear and unequivocal, and, therefore, not open to construction.

We repeat that we have not before us the question of a mistaken election of remedy; nor have we before us the question of an employee engaged in interstate commerce, as was the case of Waters v. Guile, 234 Fed. 532, and kindred cases, where it is held that congress, acting under the commerce clause of the Federal Constitution, has occupied the field, and the Federal employers’ liability act of April 22, 1908, affords the sole and exclusive remedy for injuries, received, a doctrine which was accepted by this court in Carey v. Railway Co., ante, 12. But the doctrine of these cases is based on the theory that congress, having legislated upon a subject committed to it, has, thereby, excluded the State from legislation on the same subject, and that, therefore, the State legislation must fail when sought to be applied to employees engaged in interstate commerce. But here we are dealing with a Michigan employer and a Michigan employee and a Michigan statute enacted within the scope of the power of the Michigan legislature. By its express terms the employer is released from liability in a suit at law by the filing of á claim for compensation under this act. The dependent of decedent having claimed compensation under the act, and the employer, defendant here, having admitted liability and offered to pay compensation under its provisions, nothing remains except to determine the amount of such compensation. This must be done under the provisions. of the act. An action at law is not maintainable and a verdict for defendant was properly directed.

The judgment must be affirmed.

Bird, Moore, Steere, Brooke, and Stone, JJ., concurred. Ostrander, C. J., and Kuhn, J., did not sit.


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      In re TELLER’S ESTATE.
    1. Estates of Decedents — Claims—Services Rendered — Parent and Child — Presumptions.
    While it is the settled law of Michigan that services performed by a child for a parent are presumptively performed gratuitously, the presumption may be rebutted by evidence that both parent and child acted upon the understanding that the services were to be paid for.
    2. Same — Implied Contract — Question for Jury.
    In an action by a son against the estate of his mother for services performed under an arrangement with her that he wás to be paid out of the estate, evidence held, sufficient to raise a question of fact for the jury.
    3. Same — Release—Settlement.
    A receipt from the son to the mother expressing a nominal consideration “in full of all demands, accounts, actions, or causes of action whatsoever, to and including this ' date,” is not a settlement conclusively binding upon claimant, where the evidence shows that a similar contemplated receipt to be signed by the mother was not signed, that there was no going over of accounts, or a determination of balances, or a payment of any money by either to the other.
    4. Fraud — Estoppel.
    It is a well understood rule, based upon general principles of public policy, that courts will not extricate parties from a situation in which, by their own acts, they have placed themselves in perpetrating, or attempting to perpetrate, a fraud on others; that, if fraudulent contracts are executed, courts may not be appealed to to work a restoration of the property, and, if executory, they will not lend their aid to work an enforcement.
    5. Estates of Decedents — Release — Fraud — Estoppel — Question for Jury.
    Where there was testimony Jhat the mother stated that the receipt was given to her for the purpose of defrauding claimant’s wife, but claimant’s participation in the fraud, if any, was not conclusively shown, the trial court was not in error in refusing to direct a verdict on the ground, that claimant was estopped to dispute the receipt on the ground of fraud; but the court’s refusal to submit the question to the jury, as he was requested by appropriate requests to do, constituted reversible error.
    Error to Livingston; Miner, J.
    Submitted January 16, 1918.
    (Docket No. 13.)
    Decided March 27, 1918.
    John Teller presented a claim against the estate of Eliza Teller, deceased, for services rendered. The claim was allowed in the probate court, and Ella Madden, an heir, appealed to the circuit court. Judgment for claimant. Contestant brings error.
    Reversed.

      Roy D. Matthews and Edmund C. Shields, for appellant.

      Louis E. Rowlett and W. P. Van Winkle & Son, for appellee.
   Fellows, J.

John Teller filed this claim against the estate of Eliza Teller, deceased, for services performed in the conduct of her farm in Cohoctah township, Livingston county, during the years 1890 to 1899. Deceased was the mother of claimant. It is his claim that he reached his majority during the year 1890 and remained with her on the farm for nine years under an arrangement that he was to be compensated when she was able so to do, and if he was not paid before her death he should be compensated out of her estate. He obtained a verdict and had judgment thereon at the circuit in the sum of $1,400.

It is first urged as grounds for the reversal of this judgment that the court should have directed a verdict against the claimant because no contract was proved between him and deceased, warranting the submission of that question to the jury. It is the settled law of this State that services performed by a child for the parent are presumptively performed gratuitously, that they are performed in the line of filial duty and compensation cannot be recovered by proof alone of the services and their value. Wright v. Senn’s Estate, 85 Mich. 191; Boughton v. Boughton’s Estate, 111 Mich. 26; Harris v. Harris, 106 Mich. 246; but it is equally the settled law of this State that in this class of cases it is not necessary to establish that at a given time before the services were rendered a formal contract was entered into by the parent and child, for the payment on the one hand and performance of the services on the other, and it will be sufficient if the evidence establishes that both parent and child acted upon the understanding that the services were to be paid for. Where both parties understood and expected that the services are to be paid for the presumption above adverted to is rebutted. Sammon v. Wood, 107 Mich. 506; Ashley v. Smith’s Estate, 152 Mich. 197; In re Abel’s Estate, 173 Mich. 93; Maynard v. Schrumpf’s Estate, 192 Mich. 494; Galloway v. Scully, 199 Mich. 181. Without detailing the testimony it will be sufficient to say that the testimony of witnesses, who claimed to have talked with deceased in her lifetime, her relatives and neighbors, made a case for the jury within the cases last above cited.

On September 25, 1900, and after the services here involved had all been performed plaintiff signed and delivered to the deceased the following paper:

“Cohoctah, Sept. 25, 1900.
“Received of Eliza Teller, one dollar in full of all demands, accounts, actions or causes of action whatsoever, to and including this date.
“John Teller.”

It appears from the testimony that Mrs. Teller prior to this day had caused this receipt, with the date left blank, to be prepared by a justice of the peace, together with a receipt of similar purport from herself to claimant. The testimony of those present when this receipt was signed was to the effect that it was signed at her request, and that she offered to execute the similar paper to claimant, but that he told her he did not want it, and that it was understood that all accounts between them were settled and that claimant had no claim against his mother. To meet this testimony, and it was done in making out the case in chief, claimant’s counsel in his opening statement to the jury having admitted the execution of this receipt, there was offered and received in evidence the testimony of witnesses tending to show that deceased, after the execution of this paper, admitted her indebtedness to claimant; the testimony of two witnesses was also given to the effect that they had conversations with deceased shortly before this date in which she expressed herself as apprehensive of trouble from claimant’s wife, Maggie, in case claimant should die before she did. They state that they advised her to take a receipt from John. On cross-examination they say, in response to questions asked by defendant’s counsel, that they so advised and the receipt was given to beat claimant’s wife, Maggie.

Counsel for the estate, while not controverting the rule that a receipt may be disputed, insists that this was something more than a receipt, and that it is conclusively established that a settlement of all matters between claimant and deceased was had which could only be set aside for fraud or mistake. It is pointed out that mutual receipts were prepared and that the language found in the receipt in question: “in full of all demands, accounts, actions or causes of action whatsoever, to and including this date,” taken in connection with the other paper prepared for Mrs. Teller to sign, conclusively shows a settlement and that the court should have directed a verdict- for the estate for this reason. We-cannot follow counsel in this contention. Mrs. Teller did not execute the receipt to claimant, there was at this time no going over accounts, or a determination of balances or a payment of any money by either to the other. We think the case on this question is controlled by Van Slambrook v. Little’s Estate, 127 Mich. 61, a case not unlike this one, except that 'the question of public policy, to which we shall now give attention, was. not there raised.

It is a well understood rule that courts will not extricate parties from a situation in which, by their own acts, they have placed themselves in perpetrating or attempting to perpetrate a fraud on others. This is based upon no tenderness for the other party to the fraudulent transaction but is founded upon general principles of public policy. It sounds ill in the mouth of the party engaged in the perpetration of a fraud to claim that the transaction was immoral and fraudulent; courts will leave the parties, engaged in such fraudulent transactions where they have placed themselves. If their fraudulent contracts are executed courts may not be appealed to to work a restoration of their property; if their contracts are executory courts will not lend their aid to work their enforcement. Knight v. Linzey, 80 Mich. 396; Williams v. Clink, 90 Mich. 297; Stoney Creek Woolen Co. v. Smalley, 111 Mich. 321; Bryant v. Wilcox, 137 Mich. 669.

It was well said by Mr. Justice Spofford, speaking for the supreme court of Louisiana, in the case of Boatner v. Yarborough, 12 La. Ann. 249:

“But judicial tribunals should not be called upon to adjust the balance of profit and loss between joint adventurers in iniquity. No action lies for the price of fraud. The law, whose mission is to right the innocent and to enforce the performance of licit obligations only, leaves parties who traffic in forbidden things and then break faith with [each] other, to such mutual redress as their own standard of honor may award.”

If the .claimant and his mother, for the purpose of working a fraud upon claimant’s wife, Maggie, entered into a scheme or arrangement, whereby the paper above referred to was executed for the purpose of furnishing fraudulent evidence of a settlement between them, it does not lie in the mouth of claimant to assert such fraud for the purpose of defeating the receipt. He must accept the situation in which he, by his fraudulent conduct, placed himself.

At the close of claimant’s proofs and again at the close of the case counsel for the estate moved for a directed verdict for the reason, in addition to those already disposed of, that the undisputed testimony showed that the receipt was given for the purpose of committing a fraud on claimant’s wife, Maggie. These motions were overruled and error is assigned thereon. Upon a motion for a directed verdict the testimony most favorable to the opposite party must be taken as true and the legitimate inferences to be drawn therefrom most favorable to his case must be permitted. While it is true that the two witnesses heretofore referred to testified on cross-examination to their advice to deceased to have claimant execute the receipt for the purpose of defrauding claimant’s wife, and it may be legitimately inferred from the testimony in the case that claimant participated in such fraudulent purpose, still we are impressed, upon a consideration of all their testimony, together with the other testimony in the case, that it is not conclusively established that claimant did participate in such fraudulent purpose, or that the purpose of giving the receipt was not to relieve her from worry. The court did not err in refusing to direct a verdict for the estate for this reason, but-he should have submitted this question to the jury. This he refused to do, although appropriate requests were submitted. It was reversible error not to give these requests or the substance of them.

Aside from the subject last referred to, the charge fully protected the rights of the estate. We have examined the other errors assigned; they are not likely to arise on a new trial and we do not find it necessary to discuss them. For the error pointed out the case must be reversed and a new trial granted, with costs of this court to appellants.

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


text:
    GLEASON v. STONE.
    1. Trial — Principal and Agent — Issue—Question for Jury.
    Where plaintiff brought suit to recover a balance of rent claimed to be owing to him by defendants, sublessees of another, conflicting testimony as to whether he was acting as principal or as agent of the lessee in the arrangement made with defendants to pay additional rent, presented a question of fact for the jury.

      2. Same — Evidence—Landlord and Tenant — Release—Principal and Agent.
    In such action, evidence sustaining the theory of defendants that they dealt with plaintiff as agent of the lessee, and that the latter subsequently agreed to take care of the indebtedness for which suit was brought, was admissible.
    3. Same — Estoppel—Instructions.
    An instruction that, if defendants agreed to pay the last month’s rent, and in reliance thereon plaintiff paid it, that there would be a sufficient consideration for the promise, and defendants would be estopped to deny liability, fully ' protected the rights of plaintiff.
    4. Appeal and Error — Review.
    Where there was no request to charge on the question of sufficiency of tender in the justice’s court, and nothing in the record to show that the attention of the trial court was directed to the question, it is not before the Supreme Court for review, although discussed in counsel’s brief.
    5. Trial — Appeal and Error — New Trial.
    Where the evidence was in sharp conflict on the material questions, the trial court did not err in refusing to direct a verdict for plaintiff, or in refusing his motion for a new trial on the ground that the verdict was against the weight of the evidence.
    Error to Kent; Cross, J., presiding.
    Submitted January 30, 1918.
    (Docket No. 82.)
    Decided March 27, 1918.
    Assumpsit in justice’s court by Clark H. Gleason against Clifton G. Stone and others for rent. There was judgment for plaintiff, and defendants appealed to the circuit court. Judgment for defendants. Plaintiff brings error.
    Affirmed.

      Gleason & Lee (Myron H. Walker, of counsel), for appellant.

      Rodgers & Rodgers, for appellees.
    One Henry Steinbrecher held a lease on certain property in Grand Rapids, consisting of two stores on the ground floor and rooms on the second floor above them. The monthly rental was $125. The second floor was occupied by Steinbreeher for a tailoring establishment. One of the stores was sublet by him to a barber at $55 per month, the other to defendants at $65 per month. Steinbreeher seems to have been dissipated and went away for treatment for his habit, leaving his sons in charge of the business. They possessed some of their father’s failings and Mrs. Steinbreeher grew apprehensive that the rent would not be paid so that the business could be kept going during her husband’s absence. She saw the plaintiff, an attorney who had done some business for her husband, with reference to the situation. She also sent to the plaintiff a desirable tenant for the store occupied by the barber who was behind in his rent. The parties, so far as the record discloses, seem to be in accord to this point. As'to subsequent points they disagree. It is the claim of the plaintiff that he took upon himself, as a matter of friendship for Mr. Steinbreeher, the arrangement of the matter so as to insure for the sublessees their continuance of possession and the collection of sufficient money from them to pay the $125 per month to Steinbrecher’s landlord; that to do this he leased the store occupied by the barber to a new tenant at $57.50 per month and made an agreement with defendants that they should pay $67.50 per month for the balance of their term, thus insuring the nonforfeiture of the lease. It is his claim that defendants paid their monthly rent until the last month, when they, after repeated promises to pay the $67.50, tendered him the balance which would be due at $65 per month, and demanded a receipt; He refused this tender and brought this suit in justice’s court. The defendants claim that they did not make an agreement with plaintiff to pay additional rent; that plaintiff called upon them claiming to represent Steinbreeher; that he did ask for an increase of their rent by $2.50 per month; that he told them if the additional rent was not paid their lease would lapse and they would be put out; that they paid the additional rent demanded under protest, and with the statement from them that they would see Steinbrecher on his return and arrange with him; that on his return they did arrange with him that they should continue to pay plaintiff the amount demanded by him, and that he, Steinbrecher, then stated that he was down and out, but as soon as he got straightened away he would take care of it before the end of the lease; that not having done so, they tendered the balance due in accordance with the terms of their lease. Defendants had verdict and judgment upon the trial at the circuit upon appeal, and plaintiff brings the case here.
   Fellows, J.

(after stating the facts). If plaintiff, in making the arrangements with defendants, whatever they were, was. acting solely as agent for Steinbrecher, and this, was a question for the jury, then defendants were not prevented from dealing directly with his principal. It was the claim of plaintiff that defendants paid to him $67.50 per month rent because of an agreement with him individually to that effect. It was defendants’ claim that such payments were made pursuant to an agreement with plaintiff’s principal. It was not error for the court to admit, testimony offered by defendants to sustain their claim, they having already given evidence making the question of plaintiff’s agency one for the jury. Defendants’ claim was not for an offset, but that they had paid and tendered the full amount due on their lease and agreement with plaintiff’s principal. The court committed no error in admitting evidence of what this agreement was. ■

It was the claim of plaintiff that he paid the last month’s rent in reliance on defendants’ agreement to pay the full $67.50 rent for that month and that the doctrine of estoppel should protect him in such payment. But defendants’ testimony, as we have already stated, tended to disprove this. The court instructed the jury:

“If you find by a preponderance of the evidence that in June, 1916, when the last month’s rent was due, the defendants, one or more of them, promised the plaintiff to pay the rent for that month to him, knowing that he was to pay the amount to the owner, and if you find that, relying upon that promise, plaintiff did pay the amount of $67.50 for defendants as a part of the $125.00 payment to the owners substantially as testified by the plaintiff, then I charge you plaintiff would be entitled to recover.
“In that event there would be a sufficient consideration for the promise and defendants, after such payment by plaintiff under such an agreement, would be estopped to deny liability to pay plaintiff the amount so paid by him.”

.This instruction as fully protected the right of the plaintiff as the state of the evidence would permit.

It is stated in the brief of appellant, that the tender in justice’s court did not include the costs and an interesting discussion follows as to the effect of the tender before suit brought accompanied by a demand for a receipt. But the record does not show very extensively the proceedings in justice’s court, or the amount of the tender; it does show, however, an offer by defendants’ counsel to be sworn on the trial at the circuit on the subject, and a statement by plaintiff’s counsel that he would take his word for it. We are pointed to no request to charge on the subject, or to any place in the record where the attention of the trial court was directed to the question of tender; nor are we able to find it. It is only necessary for us to say that the question is, not before us.

There was a sharp conflict in the evidence oh the material questions in the case and the court did not err in refusing to direct a verdict for the plaintiff, or in refusing his motion for a new trial on the ground that the verdict was against the weight of the evidence.

We have examined the other errors assigned and find them without merit.

The judgment is affirmed.

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