author: Hooker, J.

text:
    WEBBER v. WEBBER.
    1. Partnership — Claims Against Firm — Settlement by Partner — Liability op .Copartner.
    A partner is bound by the act of his copartner in settling a claim against the partnership for services of a third person, though the settlement is made without his knowledge.
    3. Limitation op Actions — Accrual op Action — Demand Note —Antedating—Eppeot.
    Where a demand note is given in settlement of an account, and antedated to cover interest for the period during which the account has run, the statute of limitations does not begin to run against the note until the day of its delivery to the payee.
    3. Interest — Demand Note — Antedating—Eppeot.
    An antedated note, payable “on demand after date, * ' * * with interest,” bears interest from the day of its date and not -from the day of its delivery.
    4. Partnership — Surviving Partner — Accounting—Claims Allowable.
    Where it appears that the surviving partner of a banking partnership, in settling with an employé for services, allowed him interest on his claim during the time it remained unpaid, but did not charge him interest on his overdrafts, such interest is a proper charge against the , surviving partner, on an accounting of the partnership'business.
    ■5. Same — Failure to Collect — Liability.
    Where the survivor of a banking partnership negligently allows claims to become barred by limitations, the amount thereof is properly chargeable against him, on an accounting of the partnership business.
    Cross appeals from Ionia; Hosmer, J., presiding.
    Submitted May 8, 1906.
    (Docket No. 81.)
    Decided October 1, 1906.
    , Bill by Ella M. Webber, executrix of the last will and testament of George W. Webber, deceased, against Mary C. Webber, executrix of the last will and testament of Andrew J. Webber, deceased, for an accounting. From the decree rendered, both parties appeal.
    Modified and affirmed.

      Knappen, Kleinhans & Knappen and Morse & Locke, for complainant.

      George E. Nichols and R. A. Hawley, for defendant.
   Hooker, J.

George W. and Andrew J. Webber were brothers, and for many years engaged in banking at Ionia as copartners. They also carried on a lumber business. Herbert B. Webber was in their employ as manager of the banking business, and is claimed by the defendant to have managed the lumber business. He and his brother George H. were sons of Andrew J. Webber. George W. Webber died in January, 1900, and Herbert B. Webber, acting for his father as survivor, proceeded to close up the copartnership business, until Andrew J. Webber’s death, which occurred October 17, 1902. This bill is filed by Ella Webber, executrix of the estate of George W. Webber, against Mary 0. Webber, the executrix of Andrew J., for an accounting. Both parties have appealed from the decree rendered.

The items claimed by complainant to be chargeable against the defendant are:

(1) The amount of cash on hand, $252.96; (2) a bank overdraft of George H. Webber, $742.37; (3) an overdraft of A. J. Webber as receiver, $489.03; (4) the principal of a note paid H. B. Webber by A. J. Webber, $3,891.49; (5) interest paid upon said note, $1,415.61; interest on above, $373.09; (6) interest upon an alleged excess of overdrafts of H. B. Webber over said note, $202.12; or if interest is not allowed on note, then interest on all overdrafts of H. B. Webber from 1896 to April 30, 1901; (7) a note given by George H. Webber with interest, $836.04; (8) an overdraft by George H. Webber of $1,249.62, and interest; (9) a note given by George H. Webber for $1,690.90, with interest.

Defendants admit the first three items, and we shall consider the others, stating in each instance such facts as will serve to show the nature of the question before us.

4. A check dated March 7, 1900, and signed “Webber Bros.,” for $5,307.10, payable to H. B. Webber, or bearer (note and interest) was introduced. Upon it was a memorandum as follows:

Note, ' $3,891 49
Int. 6 per cent. 6 yrs. (Paid Mar. 7, 1900)
7 mo.
18 days..........................-$1,415 61
$5,307 10
[Signed] ' Webber Bros.

This check was drawn and delivered to H. B. Webber, by A. J. Webber, at its date, and was in payment of a note reading as follows, viz.:

“Ionia, Mich., July 17th, 1893.

“On demand after date we promise to pay to H. B.. Webber, or order, thirty-eight hundred ninety-one and 49-100 dollars at the Banking House of Webber Brothers, Ionia, Michigan, with six per cent, interest. Value received. Paid .Mai*ch 7,1900.

[Signed] “ Webber Bros.”

This note was executed and delivered by A. J. Webber, February 24, 1896, and there is testimony in the case which convinced the circuit judge that it was for a salary earned by H. B. Webber, in the care of the lumber business, with the acquiescence of George W. Webber.

There is testimony that this was done upon a settlement of the salary matter between A. J. Webber and H. B. Webber, and that the note was dated back to January 17, 1893, to cover interest for the period after the salary became due. It is earnestly contended that this was not a just claim against Webber Bros., but we agree with the learned circuit judge that a fair preponderance of proof sustains the item as one due from the firm. Aside from the testimony of H. B. Webber upon the subject, which

both parties appear to consider inadmissible, by reason of the statute, there is proof warranting the belief that H.. B. Webber performed services in the lumber business; that George W. Webber treated them as worthy of payment by drawing a check in one instance. A statement of the claim was made several years before George W. died, and one of the partners adjusted the claim by giving a note. Grant that George W. knew nothing of these transactions, this settlement was as binding upon him as upon A. J. Webber, being the act of his copartner in the business of the concern, except as the relationship between A. J. and H. B. Webber may tend to discredit the good faith of the transaction. We think the proof fairly repels such an inference. The complainant’s counsel say that this item should be allowed to her for another reason; i. e., that the note was barred by the statute of limitations at the time of its payment, viz., March 7, 1900; being after the death of George W. Webber. The learned circuit judge held that the statute did not begin to run upon this note until it was executed and delivered, and in this we think that he was manifestly right. The note was made and delivered February 24, 1896. It was payable on demand after date, the date being January 17, 1893. A right of action could not accrue on the note until it was made, and the statute of limitations fixes the period within which action must be commenced at six years after the right of action accrued.

The case of Collins v. Driscoll, 69 Cal. 550, is in point, holding that the date of delivery of an antedated note, payable one day after date, determines the time at which the statute begins to run. The case, of Paul v. Smith, 32 N. J. Law, 13, is distinguishable. In that case the new promise was a second note antedated nearly five years, and payable three months after date. Its delivery was accompanied by a refusal to make a payment or an acknowledgment of the debt, so as .to prevent the former note from being outlawed. It was held that the substance of the transaction disclosed by the evidence was that, by giving a new note dated about a year later than that originally made, the defendant promised to pay the debt, and remain liable to an action six years from the time the new note became due, but not longer; and that the case, therefore, came within the established rule that the acknowledgment of a debt, if accompanied by a promise to pay conditionally, is of no avail, unless the condition to which the promise is subjected by the defendant is complied with, or the event has happened on which the "promise depends. It was said it (the note) was not antedated by mistake, or for any unlawful purpose, but to carry into effect the object of the parties. To alter the date, or to give it a legal effect different from that expressed on its face, is not required for the purpose of justice, but would be to make a new bargain for the parties, and thus to do an injustice. We have not been referred to any other case supporting the doctrine that the time when a statute of limitations should begin to run might be anterior to the delivery of the note evidencing the obligation, because such note was antedated; and we think that the case of Collins v. Driscoll, rather than that of Paul v. Smith, states the "better rule.

5. Interest on the principal of this note was allowed against the defendant. This holding was made to rest upon the case of In re King’s Estate, 94 Mich. 411, where it was held that interest did not begin to run upon a note payable upon demand until payment was demanded. By the express terms of the note in that case, it bore interest only “after maturity,” which, for the purpose of determining when interest should begin to run, a majority of the court held to require a demand. In this case the note merely provides for the payment of interest. It is not limited to after maturity. It was not necessary, therefore, to make a demand to start the running of interest, for the note provided for its payment from the time that the note became an obligation, i. e., the date of its delivery, if not the date of the note, and we may add that while, for the purpose of determining,the time when the statutory period expired, it was proper to ascertain the date of delivery, such date was not conclusive of the time interest began to run, as the parties had a right to make interest begin from an earlier date, so long as they did not violate the usury law, of which there is, and could be, no claim. The note does not state in express terms that it shall bear interest “from date,” but that is implied ; and to dispute it would be to vary the terms of the instrument by parol.

It is conceded that if the note had been made payable one day after date or one day after demand, with interest, the obligation to pay interest from date would be clear. No good reason suggests itself for saying that making the note due on demand, i. e., at once, should be taken as an indication of an intention to defer the running of interest until demand, though it can be reasonably said when the running of interest is expressly stated to be “after maturity.” 2 Daniel on Negotiable Instruments (5th Ed.), § 1458, and note 61. We conclude, therefore, that the court should have held the item of interest to have been a proper credit.

6. The sixth item relates to interest upon certain overdrafts which H. B. Webber made, and the bank carried for a long period. A. J. Webber did not require payment of this, but paid full interest on H. B. Webber’s note, without making a claim for interest on overdrafts, and H. B. Webber never paid it. In his (H. B. Webber’s) capacity of representative of the firm and after-wards of the survivor, it was his duty to see that this was paid, and it is equitable that this should be a charge against the receivers in this case. The amount is not at hand, but will be determined on the settlement of the decree, if counsel cannot agree upon it.

7. A note of $500 was given by George H. Webber to the bank, and this was permitted to become barred after the death of George W. Webber, under circumstances which are not creditable to the survivor or his representative. The circuit judge allowed this item as claimed by the complainant, and in this we concur.

8 and 9. At the time of George W. Webber’s death, George H. Webber had overdrawn his account at the "bank $1,249.62. He also had a note there of $1,690.90 bearing interest. After the death of A. J. Webber, his administratrix, although diligent in the collection of other claims, did not press these claims. She acted in a fiduciary capacity, and was under obligation to the estate of George W. Webber to use every effort'to collect these claims, which we believe could have been collected had H. B. Webber cared to do it, and she cared to have it done. The items should be allowed, the latter with interest. The decree will provide for the charging against defendant the following items:

1. Cash on hand.

3. George H. Webber’s overdraft, $742.37, with interest to date of decree.

3. The A. J. Webber receivership overdraft with interest to date of decree.

6. Interest on the overdrafts of H. B. Webber from 1896 to April 30, 1901.

7. The amount of the $500 note of George H. Webber, with interest to date of decree, as per provisions of the decree of circuit court.

8. The $1,249.62 overdraft, with interest from the date of filing of the bill to date of decree.

9. The $1,690.90 note, with interest atráte of 6 per cent, to commencement of suit, afterwards 5 per cent, to date of decree.

It is conceded by counsel that an item of $1,000 ad-' vanced by A. J. Webber was a proper charge, and' that the decree should so state.

Subject to the modifications herein indicated, the decree will be affirmed, with taxable costs of both courts to the complainant.

Carpenter, 0. J., and McAlvay, Blair, and Moore, JJ., concurred.


source: Caselaw Access Project

license: Public Domain

text:
    MORNING TELEGRAPH PUBLISHING CO. v. S. B. HUTCHINSON CO.

    Bankruptcy — Courts—Jurisdiction—Property op Bankrupt— Custody — Adverse Claims.
    Where, at the time process from a bankruptcy court was served, certain property was not in possession of the bankrupt, but was in possession of the representative of certain of his creditors, under a conveyance which gave him the right of possession as against the bankrupt, the bankruptcy court did not acquire constructive possession of the property so as to prevent an. adverse claimant from maintaining replevin against the representative of the creditors in the State court.
    Certiorari to Wayne; Mandell, J.
    Submitted June 6, 1906.
    (Docket No. 15.)
    Decided October 1, 1906.
    Replevin by the Morning Telegraph Publishing Company against the S. B. Hutchinson Company and John B. Corliss, trustee. Adolphus Fixel, trustee in bankruptcy of defendant corporation, intervened by petition and moved to vacate the writ of replevin. There was an order denying the motion, and intervener brings certiorari.
    Affirmed.

      Bernard B. Selling, for appellant.

      Miller, Smith, Alexander & Paddock, for appellee.

       Rehearing denied November 7, 1906.

   Hooker, J.

The plaintiff brought replevin for some type-setting machines against the S. B. Hutchinson Company and John B. Corliss, trustee. The property was taken under the writ and delivered to the plaintiff, a proper bond having been given by him. The affidavit and writ were dated February 25, 1905. The sheriff’s return shows a service of the writ on February 25 th, and delivery of the goods .to the plaintiff on March 2d. Declaration was filed March 10th, and on some day, not stated, Corliss, Leete & Joslyn entered their appearance for the defendants, and demanded a copy of the declaration.

On November 2, 1905, Adolphus Pixel, describing himself as trustee of the estate and effects of the S. B. Hutchinson Company, a Michigan corporation, bankrupt, and appearing specially for the purpose, moved the court (1) to set aside the appearance of counsel for the defendant as unauthorized and void; (2) to set aside the service of the writ of replevin, and the seizure of the goods described as null and void; (3) that the action be dismissed; (4) that the plaintiff deliver to Pixel, trustee in bankruptcy, the goods and chattels aforesaid; and (5) if the goods have been disposed of, the value thereof.

No specific ground was stated in the motion. An affidavit was filed as the foundation of the motion. It alleges the filing of a petition in bankruptcy against the S. B. Hutchinson Company on February 23d; that on February 21st the S. B. Hutchinson Company had executed a mortgage to Corliss, trustee, and that such was an act of bankruptcy; that the S. B. Hutchinson Company had been insolvent for many months, and that on February 25th Paddock, a member of the firm of Miller,. Smith, Alexander Sc Paddock, plaintiff’s counsel, having in charge the replevin suit, had reason to believe, and actually did believe, said company to be then insolvent; that subpoena in the bankruptcy case was served on the S. B. Hutchinson Company on February 24th; that deponent was appointed receiver in the bankruptcy proceedings on March 2d; that on March 10th said S. B. Hutchinson Company was adjudicated a bankrupt, and that he qualified as such trustee; that the replevin suit was not commenced until February 25th, after the service of the subpoena in the bankruptcy case; that Corliss, Leete & Joslyn entered a general appearance for the S. B. Hutchinson Company on March 14th, and that he, the trustee, never authorized it, and any authority previous to his appointment had been terminated by the adjudication in bankruptcy; that the delay in filing the motion was caused by the delay in filing the sheriff’s return in the replevin case which was not done until some time in October, 1905. A transcript of the record in bankruptcy was also filed. Upon the hearing the motion was denied and proceedings stayed for 30 days. A writ of certiorari has been issued at the instance of the intervener.

We pass all questions relating to the right of a stranger to the record, who has obtained no order permitting him to intervene, to interrupt the proceedings in an action, by removing it to this court on an interlocutory application to dismiss, and assuming, but not deciding, that Act No. 310, Pub. Acts 1905, authorizes such procedure for removal, we proceed to a consideration of the question whether the cause should have been dismissed for want of jurisdiction, as that is the only question that can be raised on this record, if the act applies. Petitioner’s motion rests on the claim that when the petition in bankruptcy was filed, and process was served upon the S. B. Hutchinson Company, the Federal court acquired jurisdiction of the bankrupt’s estate, and constructive possession of all the bankrupt’s property in its possession, or in the possession of its agent; that this property was in the possession of one or the other, and that a seizure upon a writ of replevin issued later, was a violation of the rule that property in the custody of the law is not subject to seizure on judicial process, issued from another court.

It appears that on February 21st Louis Katz, a creditor, caused a writ of attachment to be levied on certain property of the S. B. Hutchinson Company, about 2 p. m. of that day, and it is claimed that the sheriff maintained his possession throughout February 21st, 22d, and 23d. On February 21st the Hutchinson Company made a mortgage to Corliss, in trust for the benefit of certain of its creditors. Corliss accepted the trust on the same day. There is testimony tending to show that he took possession of the property on February 21st, and maintained it until the goods were replevined on the writ in this cause, and the referee in bankruptcy seems to have so found. We incline to the opinion that the weight of authority sustains the petitioner’s claim, that jurisdiction, over the property of the bankrupt in his possession, attached with the service of process, and constructive possession thereof was thereby acquired by the Federal court. It is, however, unnecessary to determine this question, for the reason that the case can turn upon another.

At the time that the Federal court process was served this property was not in the possession of the bankrupt. He had parted with such possession, and there is testimony showing it to have been in the hands of Corliss, not in the capacity of agent of the bankrupt, but as a representative of certain creditors, under a conveyance which conferred subh rights, and against whom, by reason of such conveyance, the bankrupt had no right of possession. Consequently when the petition in bankruptcy was filed, the court did not acquire constructive possession, because it could not acquire possession of property held and claimed adversely by third parties. Such party was entitled to a hearing before he could be deprived of his possession. We need not spend time in a .discussion of the means necessary for the petitioner to adopt to acquire possession of such property, if he claimed the adverse holding was fraudulent. It is enough that by reason of the situation that court did not acquire actual or constructive possession, through the filing of the petition in bankruptcy, and had not done so up to the time the plaintiff asserted his claim, by commencing the replevin suit, whereby he terminated the possession of Corliss, and established his own, one no less adverse to the bankrupt. ■ If it be said that Corliss did not have the possession, and that the property was in the actual possession of the sheriff, holding by virtue of a levy of an attachment issued from a State court, the case is not weaker, for it not only shows that it was held adversely by the sheriff, but that actual possession was in the court issuing the attachment, and hence could not be in the Federal court, and before those proceedings were terminated the plaintiff acquired his possession through a writ issued by the same court.

That property held adversely at the time the petition in bankruptcy is filed is not the subject of summary appropriation by the district court, and that such a holding as this is an adverse holding are rules deducible from the following cases:

In re Rockwood, 91 Fed. 363, is a case where one holding under a chattel mortgage at the time that the petition in bankruptcy was filed was held to be an adverse claimant and the property was not subject to seizure upon a warrant issued to the marshal. It was said:

“ Section 69 [Act July 1,1898, 30 U. S. Stat. chap. 541] does not confer any authority on the court to arbitrarily deprive her of the possession of property held by her under a claim of title.”

Again, in Re Kelly, 91 Fed. 504, it was said:

“ It [the act] cannot be so extended as to authorize the summary seizure of property in the possession of a third person, not a party to the proceedings, who claims title thereto, under a conveyance from the bankrupt, although such conveyance is alleged to be an illegal preference, and voidable under the act.”

In re Buntrock Clothing Co., 92 Fed. 886, is a similar case. There personal property scheduled as assets passed into the possession of creditors holding mortgages thereon, before the commencement of bankruptcy proceedings, and was held by them. It was held that they could not be compelled to surrender them to the trustee on his petition, in a summary proceeding, in the court of bankruptcy; citing Yeatman v. Savings Institution, 95 U. S. 764. See, also, Boonville Nat. Bank v. Blakey, 107 Fed. 893.

In Beach v. Grocery Co., 116 Fed. 143, the circuit court of appeals, fifth circuit, held that it was error for a court of bankruptcy to appoint a receiver to take possession of property, and to make a summary order for the sale of such property, without consent of the adverse claimant in actual possession. See, also, In re Andre, 135 Fed. 736.

In the case of Eyster v. Gaff, 91 U. S. 521, it was said:

“The opinion seems to have been quite prevalent in many quarters at one time, that, the moment a man is declared bankrupt, the district court which has so adjudged draws to itself by that act not only all control of the bankrupt’s property and credits, but that no one can litigate with the assignee contested rights in any other court, except in so far as the circuit courts have concurrent jurisdiction, and that other courts can proceed no further 'in suits of which they had at that time full cognizance; and it was a prevalent practice to bring any person, who contested with the assignee any matter growing out of disputed rights of property or of contracts, into the bankrupt court by the service of a rule to show cause, and to dispose of their rights in a summary way. This court has steadily set its face against this view.

“ The debtor of a bankrupt, or the man who contests the right to real or personal property with him, loses none of those rights by the bankruptcy of his adversary.

“ The same courts remain open to him in such contests, and the statute has not divested those courts of jurisdiction in such actions. If it has for certain classes of actions conferred a jurisdiction for the benefit of the assignee in the circuit and district courts of the United States, it is concurrent with and does not divest that of the State courts.” •

And in Bardes v. Hawarden Bank, 178 U. S. 532, it was said:

“ It was also repeatedly held by this court that the right of an assignee in bankruptcy to assert a title in property transferred by the bankrupt before the bankruptcy to a third person, who now claimed it adversely to the assignee, could only be enforced by a plenary suit, at law or in equity, under the second section of the act of 1867; and not by summary proceedings under the first section thereof, notwithstanding the declaration in that section that the jurisdiction in bankruptcy should extend ‘ to the collection of all the assets of the bankrupt,’ and ‘to all acts, matters and things to be done under and in virtue of the bankruptcy,’ until the close of the proceedings in bankruptcy.”

Again, in Louisville Trust Co. v. Comingor, 184 U. S. 18, it was held that where an assignee asserted adverse claims existing at the time the petition was filed they could not be disposed of on summary proceedings.

The case of Mueller v. Nugent, 184 U. S. 1, upon which counsel relies as supporting his claim, is not at variance with this rule, if we understand it aright, as we think appears from a review of that case in York Manfg. Co. v. Cassell, 201 U. S. 344. See, also, In re Wells, 114 Fed. 222; Kennedy v. Loan Co., 100 Mo. App. 269; In re Smith, 9 Am. Bankr. Rep. 590, 119 Fed. 1004. If correct in these conclusions, it would seem to follow that the State court was the first to acquire possession of this property, and therefore that it should retain jurisdiction of the replevin suit. There is no hardship in this; for, upon a proper application, the trustee would doubtless be permitted to intervene and defend the replevin case.

The order of the circuit court is_ affirmed.

Carpenter, C. J., and McAlvay, Ostrander, and Moore, JJ., concurred.


author: McAlvay, J.

text:
    ATTORNEY GENERAL, ex rel. ALEXANDER, v. McCLEAR.
    1. Drains — Construction—Authority—Constitutional Law— Public Health.
    Independent of the consideration of necessity on account of the public health, there is no authority in the legislature to enact laws for the condemnation of private property, and to levy taxes for the construction of drains.
    2. Same — Local Self-Government — Drain Commissioner — Appointment by Governor — Constitutional Law.
    The enactment of drain laws being the exercise of those police powers inherent in every government for the protection of the public health, Act No. 592, Local Acts 1905, providing in section 5 for the appointment of a drain commissioner for Livingston county by the governor, is not an interference with local self-government as guaranteed by the Constitution.
    3. Same — Constitutional Law — Internal Improvement.
    The drain law of this State does not conflict with section 9, article 14, of the Constitution, prohibiting the State from engaging in works of internal improvement.
    Error to LivingstonMiner, J.
    Submitted June 7, 1906.
    (Docket No. 40.)
    Decided October 1, 1906.
    Quo warranto proceedings by John E. Bird, attorney general, on the relation of William Alexander, against Eugene T. McOlear to try the title to the office of drain commissioner. There was judgment for respondent, and relator brings error.
    Reversed, and judgment of ouster entered.

      Glenn S. Mack, for appellant.

      Louis McOlear, Bichará D. Boche, and Louis E. Howlett, for appellee.
   McAlvay, J.

These are quo warranto proceedings instituted in the circuit court for Livingston county against Eugene T. McOlear to determine by what right he held and exercised the office of drain commissioner in and for said county. Relator claims title to this office by virtue of appointment made by the governor under Act No. 592, Local Acts 1905, passed by the legislature, ordered to take immediate effect June 1,1905, entitled, “An act to provide for the election of public officers within the county of Livingston.” This act repealed all acts and parts of acts inconsistent with its provisions. The section under consideration and under which the appointment of relator was made is as follows:

Sec. 5. The county drain commissioner for the county of Livingston shall hold office for a term of two years and shall take and file the constitutional oath of offióe with the county clerk of the county of Livingston, together with the bond now required by law for the faithful performance of the duties of his office; the term of his office shall begin on the first day of January following his election: Provided, That when the term of office of the present drain commissioner of the county of Livingston expires on January one, nineteen hundred six, the governor of the State of Michigan shall appoint his successor, who shall hold office for the term of one year or until the duly elected drain commissioner for the county of Livingston, takes the constitutional oath of his office and assumes the duties thereof on the first day of January, nineteen hundred seven. ”

Relator was appointed by the governor October 5, 1905, for the term of one year beginning January 1, 1906. At the October, 1905, session of the board of supervisors of Livingston county, to wit, on October 10, 1905, said board by resolution declared this act of the legislature authorizing this appointment by the governor unconstitutional, and elected respondent who was the then incumbent of the office, drain commissioner of Livingston county “for the ensuing term. ” Both these parties filed their official bonds which were approved by the county clerk, and both took and filed the oath of office. On January 2, 1906, relator made due demand upon respondent to surrender to him the office, and books, papers, and records appertaining thereto, which demand was refused. These proceedings were then commenced. Issue was joined and the cause was heard before the court without a jury. The circuit judge held that the portion of the act authorizing the governor to make the appointment for one year was unconstitutional:

1. Because the act contravenes the right of local self-government.

2. That it is in conflict with article 14, §' 9, of the Constitution of the State which prohibits the State from engaging in works of internal improvement.

There are no disputed facts in the case. The only question before this court is whether the court was in error in holding that portion of the act authorizing the appointment hy the governor unconstitutional. We can eliminate the question as to whether this appointment can be held as •one the legislature might authorize on account of exigency, for we are satisfied that if that is the only reason invoked to sustain it, that portion of the statute must be declared unconstitutional. The statement of this court upon this point as given in Moreland v. Millen, 126 Mich. 385, 386, is certainly applicable:

“ It is not apparent to us, from the terms of the law, or from circumstances of which we may take judicial notice, that there was a necessity for departing from the rule which gives to the city the right to select its officers for the conduct of its local affairs. * * * Not only do we discover no evidence of an exigency, but the act itself indicates its absence, as it provides for appointment * * * in case of a vacancy.”

If a drain commissioner may be said to be strictly a local officer this case cannot be distinguished from the case of Moreland v. Millen, supra, and must be controlled by it.

It is urged by the relator that a drain commissioner is not an ordinary local officer; that he may be considered by the courts, and in fact is, an officer acting by virtue of the police powers of the State, and exercising its functions for the benefit of the public health. It is the settled law of this State that, independent of the consideration of necessity on account of the public health, there is no authority in the legislature to enact laws for the condemnation of private property, and to levy taxes for the construction of drains, and that such legislative action is a provision for the exercise of those police powers inherent in every government for the protection of the people. The drainage laws of this State are framed and based upon this fundamental proposition. As the basis of every valid proceeding under these laws the drain commissioner must find that the drain is necessary to the public health. Brady v. Hayward, 114 Mich. 326; Kinnie v. Bare, 68 Mich. 625; Cooley on Constitutional Limitations (7th Ed.), pp. 734, 770. The power of the State to care for the health and welfare of the people is conceded, but it is urged that the State already has all the official machinery essential to the complete exercise of its powers in that regard, the State and local boards of health being clothed with adequate authority. The State is not limited to any particular method or set of officials by and through which it shall perform its functions in the interest of the public welfare.’ The legislature may provide any suitable and proper method within the limitations of the power to be exercised. It is recognized that' the power under consideration is frequently directly exercised in municipalities or districts by levying taxes and exercising the right of eminent domain for the construction of drains. Cooley on Taxation (2d Ed.), p. 684. Upon this proposition alone have the drain laws of this State been upheld by the courts. It follows that a drain commissioner is not a local officer, but an officer exercising public functions on behalf of the State under and by virtue of its police powers. His appointment then would not be in contravention of the principle of local self-government and unconstitutional, and the legislature could provide that such appointment be made by State authority. In the Moreland Case, supra, the appointment was of a local officer, and that case merely decides that there was no exigency and that the appointment provided for in the act exceeded the power of the legislature. The question involved in the case at bar was not considered. For the reasons stated this case is distinguishable from the Moreland Case. The act providing for this appointment by the governor is not unconstitutional.

The case of Wilcox v. Paddock, 65 Mich. 23, relied upon by respondent, is not in point. That case does not hold that land may be condemned and taxes levied for the purposes of a drain for other than purposes of the public health without the consent of the individual. In that case the question now before us was not discussed. The act under consideration was held unconstitutional as contravening the prohibition ¿gainst the State engaging in any work of internal improvement, and that the taxing power of the State was being used in defiance thereof; that the legislature had no power to confer authority upon the probate judge of Gratiot county to appoint a commissioner foreign to the county to determine the necessity of the work, and assess taxes for benefits upon land and to superintend such improvement; and that the title of the act was defective. The question of the police powers of the State is not considered. In the opinion it is expressly stated that under the act—

“ The good of the public health need not be necessarily considered. * * *

“The lands are not assessed for taxation because of benefits to the public health, but the taxes are assessed upon and paid by the lands, easements and property benefited thereby (referring to the construction of the improvement), and by any township, city or village by reason of the benefit to the public health, and as a means of improving any public highway. * * * Her lands are assessed for a work of internal improvement as well as for the benefit of the public health.”

The constitutionality of the general drain laws of the State has been upheld by this court. Matthias v. Cramer, 73 Mich. 5; Smith v. Carlow, 114 Mich. 67; Gillett v. McLaughlin, 69 Mich. 547. In the last two cases cited, it was held that the construction of drains under this law was not in contravention of article 14, § 9, of the Constitution of the State.

The court was in error in holding that part of the act providing for the appointment of the drain commissioner unconstitutional, and denying the prayer of the relator that he be declared entitled to his office.

A judgment of ouster should have been entered against respondent. The judgment of the circuit court is reversed, and a judgment declaring relator entitled to the office, and of ouster against respondent entered in this court, with costs of both courts to relator.

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


text:
    GOODENOUGH v. BURTON.
    1. Costs — Security—Chancery Court — Jurisdiction.
    Irrespective of whether section 9992, 3 Comp. Laws, applies to chancery causes, the circuit court in chancery has jurisdiction to order security for costs in a case before it, such power being incident to courts of general jurisdiction both at law and in equity.
    2. Appeal and Error — Review — Matters Considered — Discretionary Rulings.
    This court will not review the exercise of discretion of a circuit judge in ruling on a motion for security for costs.
    3. Costs — Security—Motion—Time to Pile.
    Where a motion for security for costs is filed with, or soon after, the answer, it is within the discretion of the circuit judge to determine whether it should be denied on the ground of laches.
    4. Dismissal — Security for Costs — Failure to File.
    It is proper to dismiss a bill for failure to comply with an order for security for costs, reasonable opportunity for compliance having been given.
    Appeal from Barry; Smith, J.
    Submitted June 7, 1906.
    (Docket No. 59.)
    Decided October 1, 1906.
    Bill by Triphena Goodenough" against Edward A. Burton, administrator of the estate of Charles S. Burton, deceased, and others, for an accounting. From a decree dismissing the bill on failure to give security for costs, complainant appeals.
    Affirmed.

      Dwight Goss (Robert B. Dawson, of counsel), for complainant.

      Golgrove & Potter, for defendants.
   Hooker, J.

In this cause the defendant moved for, and was granted, an order for security for costs, upon a showing that an execution could not be collected from the complainant’s property. The motion was made 20 days after the answer was filed, presumably as soon as a session of court would permit of its being heard. The complainant opposed it on three grounds:

1. That'the statute does not permit such an order in a chancery case.

2. That it is inequitable under the showing made, complainant admitting her poverty and filing an affidavit of merits.

3. That the motion was unduly delayed.

1. If the statute (section 9992, 3 Comp. Laws) does not apply to chancery causes, a court of equity has the power to order security for costs, which is incident to courts of general jurisdiction both at law and in equity. See Newman v. Landrine, 14 N. J. Eq. 292; Dyer v. Dunivan, 3 How. Prac. (N. Y.) 135; People, ex rel. Fuller, v. Oneida Common Pleas, 18 Wend. (N. Y.) 652; Swift v. Collins, 1 Denio (N. Y.), 659; Bradwell v. Weeks, 1 Johns. Ch. (N. Y.) 325; 19 Enc. Pl. & Prac. p. 340. Old Chancery Rule 6, and the present Rule 3, can have been based on nothing but such inherent power. See Skinner v. Lucas, 68 Mich. 424, which recognizes the validity of Rule 6.

2. This court will not review the discretion of the circuit judge, who makes or denies an order for security for costs.

3. While it is a general rule that an application for security should be made as early as practicable, it is commendable to accompany it by an answer to the merits, and where it is filed with or soon after such answer is filed it is within the discretion of the circuit judge to determine whether .it should be denied on the ground of laches. Shaw v. Wallace, 2 Dall. (Pa.) 179; Gedney v. Purdy, 47 N. Y. 676.

4. It was proper to dismiss the bill for a failure to comply with the order, a reasonable opportunity having been given. People, ex rel. Fuller, v. Oneida Common Pleas, supra; Gifford v. Roberts, 125 Mich. 410.

The decree is affirmed, with costs of both courts.

McAlvay, Grant, Montgomery, and Moore, JJ., concurred.


author: Ostrander, J.

text:
    WHEELOCK v. STARKWEATHER.
    1. Sales — Contract—Transfer of Title — Evidence — Question for Jury.
    In assumpsit for the price of certain hay, evidence examined, and held, that whether the title to the hay passed at the time of making the contract of sale should have been submitted to the jury.

      2. Same — Transfer of Title — Control by Seller — Effect.
    On the issue whether the title to certain hay passed to the buyer at the time of making the contract of sale, the stipulation that the seller should draw it to the cars after baling does not of itself render the contract executory.
    Error to Wayne; Brooke, J.
    Submitted June 12, 1906.
    (Docket No. 77.)
    Decided October 1, 1906.
    Assumpsit by Charles P. Wheelock and another against Edward M. Starkweather and another for goods sold and delivered. There was judgment for plaintiffs, and defendants bring error.
    Reversed.

      C. C. Yerkes, for appellants.
    P. W. Voorhies, for appellees.
   Ostrander, J.

Assumpsit for the purchase price of certain hay alleged to have'been sold and delivered by plaintiffs to defendants. There was a verdict for plaintiffs under an instruction:

“The title to this hay passed .on'the day that it was purchased as it stood in the stack; that from that moment these stacks of hay belonged to Starkweather & Daniels, and it stood there at their risk, subject, however, to such duties in connection therewith as were cast upon the plaintiffs, either by their agreement with reference to its delivery, or by the duty imposed upon Bridger to properly do what he undertook voluntarily to do with reference to its care after it was baled and before it was delivered.”

It is the contention of defendants, the plaintiffs in error, that if the testimony supported any conclusion as to when the title passed it supported the converse of the conclusion stated by the court; that the question was properly one of fact for the jury. A careful reading of the testimony warrants the statement that there is no substantial dispute between the parties concerning the bargain which was made. Defendants are buyers of hay which they press and ship to market. Plaintiffs are farmers. Defendant Daniels testified:

I went to buy this hay and offered them $7 a ton for it. They accepted it, and I gave them a check on the hay. We were to send a man to press it and it was to be delivered at Plymouth as soon as cars could be obtained. * * * When I bought the stacked hay, I ran my hand into the stacks and made an inspection of it.”

The thing bought and sold was distinguished, the price to be paid was agreed upon. The vendee was to bale the hay and weigh it. The vendor was to draw it to Plymouth to cars to be' furnished by the vendee. The agreement then made proceeded no further. The time and manner of payment of the balance of the purchase price were not discussed. It was not agreed that title should pass. Thereafter the vendees, aided by the vendors, pressed the hay into bales, weighed it, made memorandum of the weights, and placed on each bale a tag showing its weight. The vendors then piled the hay in the field upon a foundation made by them, and, to some extent, covered the top and sides to protect it from the rain. The hay so remained for about two weeks. During this time the vendors requested that they might draw the hay to Salem, instead of to- Plymouth. According to their testimony it was then agreed that, if vendees could get cars at Salem, the hay might be drawn there. According to defendants the vendors were told that it might be difficult to get cars at Salem, and, if in waiting for them the hay was damaged, it would be at the expense of the vendors.

“ I told him it was at his risk; that it mustn’t get wet while in the fields; that we could not take wet hay.”

During the two weeks that the hay was piled in the field it rained some. Learning there were cars at Plymouth ordered there by the vendees, the vendors, without notice to the vendees, drew the hay to Plymouth and there put it in a car pointed out by the station agent as one designed for vendees. When the hay was uncovered for the purpose of drawing it, it was found to be wet in places. In drawing it no canvas or other covering was used for the hay, and some of it was wet while on the way to the station. Others were loading hay for the defendants at Plymouth and the hay in question went forward without further inspection by the vendees, being billed out by the railroad agent under instructions from defendants to a commission house in New York City, and, it is asserted, was spoiled, and by its contact in the car with other sound hay damaged it. Defendants had no knowledge that the plaintiffs’ hay had been loaded until Monday succeeding the week of loading.

What was said when plaintiffs applied for pay is in dispute. Defendants claim they said they understood the hay had got wet; that they would make a small advance upon it and give strict account of its sale; that plaintiffs agreed to take the sales account and the returns received for their hay. The responsibility of the vendors as upon an arrangement, if one was made, to care properly for the hay after it was pressed and to properly deliver it, was left to the jury under instructions not here complained about. In such submission the court proceeded'according to the finding of title hereinbefore set out. The sole question is, therefore, whether it can be said as matter of law that title to the hay passed before or at the time the hay was baled. Aip was said by this court in Wilkinson v. Holiday, 33 Mich. 386:

‘ ‘ If one bargains with another for the purchase of property, and that is done in respect to it which the parties agree shall pass the title, nothing more is generally requisite. The question is only one of mutual assent— whether the minds of the parties have met, and by their understanding the purchaser has now become owner. This is the general rule where the case is not within the statute of frauds.”

It is clear that, if the contract was in other respects complete and the intention of the parties otherwise plain, the stipulation that the vendors should draw the baled hay to the cars would not of itself render the contract of sale executory. Terry v. Wheeler, 25 N. Y. 520; Dyer v. Libby, 61 Me. 45; People, for use of Holmes, v. Sheehan, 118 Mich. 539; Whitcomb v. Whitney, 24 Mich. 486, 491; Benjamin on Sales (7th Am. Ed.), § 319, and notes. Such a stipulation is, however, to be taken here with all the other facts and circumstances attending the transaction in determining the intention of the parties. It is true that the plaintiffs delivered the hay without arrangement as to payment of the balance of the purchase price. But defendants say this action was perhaps undertaken for the purpose of selling spoiled hay, and that it does not aid in determining the right of plaintiffs, under the contract actually made, to withhold the hay until payment for it was made. In the case at bar the identification and setting apart of the hay, the pressing done at the expense of the vendees, support inferences of an understanding that the hay belonged, at least after baling, to the purchasers. So the testimony of defendant that in reply to the request that the hay might be delivered at Salem instead of at Plymouth he told plaintiff that such course would be attended by delay and that it “ was at his risk,” and the fact that it was defendants, and not plaintiffs, who by providing cars could fix the time for loading the hay, may be said to support the inference that the title to the hay had passed.

On the other hand, it is claimed that defendants purchased hay in many places and that the delay in baling and in actual delivery is, by inference, not at their risk. And in Wilkinson v. Holiday, supra, it is said:

“ Moreover, no credit appears to have been agreed upon, and the legal inference is, where that is the case, that payment was to be made before the purchaser was to be at liberty to remove the property.”

See, also, Foster v. Mining Co., 68 Mich. 197. It was for the jury, and not the court, to draw the necessary inferences and to determine the principal fact.

The judgment is reversed, and a new trial granted.

Blair, Montgomery, Hooker, and Moore, JJ., concurred.


text:
    CHARLES BAKROW & CO. v. TOTTEN.
    1. Justices of the Peace —Costs —Nonresident Plaintiffs — Security — Failure to Require.
    A judgment rendered by a justice of the peace in favor of a nonresident plaintiff will not be reversed for failure to require security for costs before issuance of summons where security was filed, though after the return day.
    2. Same — Nonappearance of Plaintiff — Waiver.
    Where plaintiff in justice’s court fails to appear within the hour on an adjourned day, but defendant fails to leave the court-room or move for dismissal before plaintiff appears, and after plaintiff arrives moves for dismissal for the reason that plaintiff did not appear within the hour, the motion is properly denied on the ground that defendant has waived the point.
    3. Same — Appeal—Stay of Proceedings — Bankruptcy of Defendant.
    When the court was about to enter upon a trial of the merits of an appeal from justice’s court, defendant’s attorney stated that defendant had been adjudicated a bankrupt since the judgment appealed from was entered, and moved a stay of proceedings but made no proof of his statement. Plaintiff’s attorney claimed the right to take judgment to enable him to proceed against the sureties on the appeal bond, and judgment was rendered accordingly. Held, that no error was shown, since the record did not show that defendant’s statement was admitted by plaintiff to be true.
    Error to Saginaw; Beach, J.
    Submitted June 12, 1906.
    (Docket No. 87.)
    Decided October 1, 1906.
    Assumpsit by Oharles Bakrow & Company in justice’s court against Frank M. Totten upon certain promissory notes. Plaintiff recovered judgment, and defendant appealed to the circuit court. There was judgment for plaintiffs, and defendant brings error.
    Affirmed.

      Rowland Connor, for appellant.

      Lincoln M. Bradt, for appellee. •
   Hooker, J.

This cause originated in justice’s court, and a special appeal was taken by the defendant. The following is a copy of the return of the justice, viz.:

“Buena Yista, June 30th, 1904. “Charles Bakrow & Co. v. “Frank M. Totten.

“9 a.m. Cause called at my office in the township of Buena Yista.

“The plaintiff appeared by Casper W. Ulrich, agent for said company, and by Lincoln E. Bradt, his attorney. The defendant appeared in person, the plaintiff declares, orally on all the common counts and assumpsit and. specially on two promissory notes executed by the said defendant to the said plaintiffs upon which is now due the sum of $104.22 and files the said notes with the court as part of this declaration to the plaintiffs’ damage $300.00. The defendant appears specially and moves the court in said cause for the reason the plaintiffs herein is a partnership and this suit should have been brought in the name of the individual partners. The motion overruled. The defendant appears generally and pleads the general issue and files with the court an unsworn affidavit and did not request the court, to swear him to said affidavit and also demands security for costs. The parties not consented on the court’s own motion, said cause was adjourned until the 6th day of July, 1904, at 9 a. m. at my office, in the township of Buena Vista.

“ July 6th, 1904, at 9 a. m. cause called at my office, in the township of Buena Vista. The defendant appeared in person and at 9:45 a. m. the plaintiff telephoned the court that he was on his way to my. office and I notified the defendant thereof at 10:05 a. m. ' The plaintiff appeared and met the defendant at the door of the office and made a statement that he was detained at the railroad-crossing and was thereby delayed. The defendant makes a motion to dismiss the case for the reason that after waiting one full hour after the time fixed by the court on the adjourned day plaintiff failed to appear the defendant asks the case to be quashed and a release given in the garnishee case, both motions overruled by the court, case held open for half an hour, the plaintiff files security for costs and ready to proceed to trial. Casper W. Ulrich duly sworn, says there is now due and unpaid the sum of $104.22 and asks judgment for that amount, and after hearing all the evidence I forthwith render judgment in favor of the said plaintiffs, Charles Bakrow & Co., against the said defendant Frank M. Totten, for $104.22 damages, and the said plaintiff’s costs, which are hereby taxed by me at $5.00.

“ Herman Mahn,

“ Justice of the Peace.

“ Dated this 6th day of July, 1904.

"Fees $1.83.”

The -points relied upon in the special appeal are:

“1. That said justice erred in not requiring plaintiffs (who are nonresidents) to give security for costs as required by law.

“2. That the said justice erred in not dismissing said cause on the adjournment day, on motion of said defendant, when said plaintiff failed to appear, within one hour after the time said cause was adjourned to.”

As security for costs was filed, though after the return day, the judgment should not be reversed upon the first ground. Parks v. Goodwin, 1 Doug. (Mich.) 56.

Counsel contend that the return shows that the plaintiff did not appear within one hour of the time to which the cause was adjourned, and that the justice lost jurisdiction by reason thereof, and that he- should have granted the motion to dismiss at all events. Our interpretation of this return is that the plaintiff’s appearance was delayed on the adjourned day beyond the hour. He telephoned the justice that he was on the way. The defendant was present and remained until five minutes after the hour expired, when he and the plaintiff met in the door, who stated to him that a train blockaded the street, and delayed him. Thereafter, defendant moved to dismiss, for the reason that plaintiff did not appear within the hour. This motion was properly denied. When a defendant does not appear jurisdiction may be lost by plaintiff’s absence, but defendant’s presence and omission to either leave, or move to dismiss, before plaintiff’s arrival, may justly be treated as a waiver of the point. See Mudge v. Yaples, 58 Mich. 307; Grand Rapids Chair Co. v. Runnels, 77 Mich. 114; Talbot v. Kuhn, 89 Mich. 33; Township of Fruitport v. Muskegon Circuit Judge, 90 Mich. 23.

At the time the action was commenced, proceedings in garnishment were also begun. The usual bond upon appeal was also given discharging the garnishee. The judgment was rendered by the justice July 6, 1904. It was stated by counsel that on December 10, 1904, the defendant filed a petition in bankruptcy, and was adjudicated a bankrupt thereon, on December 12, 1904. This cause was then pending in the circuit court, and he opposed the entry of judgment upon that ground. The question was raised and statement made, when, after deciding the special questions, the judge was about to enter upon the trial of the merits. The claim was that the bankruptcy proceeding had the effect of staying the proceedings, under section 11 of the bankruptcy law (Act July 1, 1898, 30 U. S. Stat. chap. 541) which provides:

“Section 11. Suits by and against bankrupts, (a) A suit which is founded upon a claim from which a discharge [in bankruptcy] would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition; if such person is adjudged a bankrupt, such action may be further stayed until 12 months after the date of such judication, or, if within that time such person applies for a discharge, then until the question of such discharge is determined.”

The record contains no evidence of the truth of the statement, and defendant’s assertion that the statement was admitted to be true by counsel for plaintiffs in his argument is denied. The argument, as reported, does not contain such admission. Furthermore, there is much force in the contention that plaintiffs cannot have their right to proceed with the. case against the sureties stayed. The judge proceeded with the cause upon that theory. It does not follow that the statement was admitted. The garnishee was discharged by the appeal, and the court held that although a levy could not be made, upon defend ant’s property, plaintiffs would have a right to take a judgment against him, to bind the sureties. We do not decide this question, however, as the record does not require it.

The judgment is affirmed.

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


author: Blair, J.

text:
    WILLIAMS v. MEAGHER.
    Sales — Transfer of Title — Acceptance—What Constitutes.
    Defendants bought a set of tools of D., for which they paid him in full. The tools not proving satisfactory, they were returned and another set furnished, and the second set being unsatisfactory, defendants entered into correspondence with plaintiffs, who furnished the tools to D., and who agreed to take back the second set and furnish a third, which they did, crediting the second set to D. and charging the third set to defendants. Held, that though the first and second sets were received by defendants subject to acceptance, the shipping of them to plaintiffs was an acceptance and passed title to defendants which plaintiffs could not divest by crediting D. with their price.
    Error to Huron; Beach, J.
    Submitted June 12, 1906.
    (Docket No. 83.)
    Decided October 1, 1906.
    Assumpsit by Roger B. Williams against Edward Meagher, Jr., and Daniel Meagher, copartners as Meagher Bros., for goods sold and delivered.' There was judgment for defendants, and plaintiff brings error.
    Affirmed.

      James H. Hall (W. F. Atkinson, of counsel), for appellant.

      Bope & McNabb, for appellees.
   Blair, J.

This cause was tried before the court without a jury. The circuit judge made the following findings :

“ 1. Some time in 1902 defendant bought of one Duffield a well drilling machine and set of tools for which they paid Duffield in full.

“ 2. The tools received with the machine were not satisfactory, and Duffield undertook to replace them and did with another set purchased of plaintiff from whom Duffield liad purchased the machine and first set of tools.

“3. The second set o£ tools were not the kind wanted, and correspondence was had between defendants and plaintiffs, and the second set of tools were returned, and a -third set shipped to Meagher Bros. From' the testimony it appears that the first set of tools were sold by plaintiff to Duffield as also the second set. Meagher Bros, understood that they were receiving tools the third time in exchange for second lot of tools which they proposed to return and did return and Williams Bros, must have so understood the correspondence. The second set were ■credited to Duffield but were received from Meagher Bros.

“Conclusions of Law: The title of first set of tools passed from Williams Bros, to Duffield and from Duffield to Meagher Bros, as also the title of the second set. When second set were returned Williams Bros, could not by crediting the same to Duffield change Meagher Bros.’ ownership and if anything is due upon the last transaction it is the difference in price to Meagher Bros.”

Plaintiff!s counsel proposed amendments to the findings which were not allowed. The assignments of error are:

“1. The court erred in finding that the first and second •set of tools became the property of the defendants.

“2. The court erred in finding that thetnird set of tools was sent in exchange for the first and second sets.

“3. The court erred in finding that the plaintiff must have so understood the correspondence.

“4. The court erred in his finding of law that the plaintiff could not recover.

‘.‘5. The court erred in his refusal to amend the findings of fact as proposed by plaintiff’s attorney.”

Plaintiff’s counsel contend in their brief that there is no testimony in the record to justify the court’s findings of fact that title to the two sets of tools passed to defendants or that there was an agreement to trade the second set for the third. There was abundant evidence to support the court’s finding that the second set of tools was shipped to plaintiff by defendants upon the mutual understanding that they were to be exchanged for the third set. Although prior to the shipment of the tools defendants had not accepted the tools as in compliance with Duffield’s contract with them, the act of shipping them to plaintiff constituted an acceptance, and vested the title in them so that when received by the plaintiff they were not the property of Duffield.

The judgment is affirmed.

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


author: Blair, J. Montgomery, J. Ostrander, J.

text:
    DEES v. BOARD OF EDUCATION OF CITY OF DETROIT.
    1. Schools — Teachers’ Contracts — Termination—Notice.
    Where a teacher’s contract provides that it may be terminated on 30 days’ notice a notice to terminate is effectual though given before the commencement of the service.
    2. Same — Detroit Board oe Education — Powers.
    It is within the powers of the board of education of the city of Detroit to contract with a teacher that she may be dismissed on 30 days’ notice.
    Error to Wayne; Brooke, J.
    Submitted June 12, 1906.
    (Docket No. 76.)
    Decided October 1, 1906.
    Assumpsit by Joan Dees against the board of education of the city of Detroit on a teacher’s contract. There was judgment for defendant, and plaintiff brings error.
    Affirmed.

      Wesley L. Nutten, for appellant.

      P. J. M. Hally ( T. E. Tarsney, of counsel), for appellee.
   Blair, J.

Plaintiff was appointed by defendant in June, 1903, a teacher in the public schools, and a contract tendered her, containing, among other provisions, the following :

“The conditions of this appointment are that you are subject to assignment or transfer at the discretion of the board; to dismissal upon 30 days’ notice; ■ or at any time for willful violation of any rule of the board, or for misconduct or incompetency; * * * that you will at least give one month’s notice to the superintendent of intended resignation and that you know of no reason why you will not serve to the end of the term.”

Plaintiff accepted the appointment in writing, as follows:

“I accept the appointment of teacher in the public schools of Detroit, tendered me in your notice dated June 15, 1903, at the salary named and agree to the conditions prescribed therein.”

Prior to the commencement of her term of service, defendant notified plaintiff of her dismissal, and paid her one month’s salary; Plaintiff refused to accept her dismissal, tendered performance of the services contracted for, and notified defendant that she should insist upon her salary for the year. This action was brought to recover such salary. There being no disputed facts, the jury which heard the evidence was discharged by consent, and the determination of the case left to the circuit judge, who found for the defendant, and entered judgment of no cause of action. To reverse this judgment, plaintiff brings the cause to this court by writ of error. The contract is plain and unambiguous, and clearly gave the right to discharge the plaintiff, if the provision as to dismissal upon 30 days’ notice was within the legal powers of the board. The fact that the notice of dismissal was given before the commencement of the service was unimportant. Derry v. Board of Education, 102 Mich. 631. A different question would arise if it were sought to determine the contract on the ground of the teacher’s incompetency before the beginning of the term. Plaintiff insists, however, “that the 30-day clause in question is against public policy and void.” As this point was not made in Derry v. Board of Education, supra, nor considered by the court, we must regard it as open.- Counsel cite in support of this contention: Thompson v. Gibbs, 97 Tenn. 489 (34 L. R. A. 548). That case, like Carver v. School District, 113 Mich. 529, was decided upon a construction of statutory provisions. The Tennessee statute, after giving the school directors power to employ teachers, authorized them “to dismiss them for incompetence, improper conduct, or inattention.” It was, therefore, held that:

“This right of dismissal is, however, limited to the causes of removal specified in the statute.”

The provisions of the statute under consideration in Carver v. School District, supra, do not govern the case now before us. As said by this court in Coffin v. Board of Education, 114 Mich. 342:

“ The contract of employment was not like the one in Carver v. School District, 113 Mich. 524. There the statute prescribed what the contract should contain.”

In the instant case, the Detroit charter, § 599 (compilation of 1904), confers extensive powers upon the school board:

“ Said board shall also have authority to make by-laws and ordinances relative to making of all necessary reports’ and transmitting the same to the proper officers, as designated by law, so that said city may be entitled to its proportion of the primary school fund; relative to the visitation of schools; relative to the length of time schools may be kept, which shall not be less than three months in each year; relative to the employment and examination of teachers, their powers and duties; relative to the regulation of schools and the books to be used therein; * * * relative to anything whatever that may advance the inr terests of education, the good government and prosperity of the free schools in said city and the welfare of the public concerning the same.”

The regulations which the legislature has itself seen fit to prescribe for schools generally it has authorized the board of education of Detroit to determine for the schools of Detroit, and we think the provision in question was within the authority granted. Weatherly v. Mayor, etc., of Chattanooga (Tenn. Ch. App.), 48 S. W. 136.

The judgment is affirmed.

Montgomery, J.

I think it not essential to a decision to determine whether the school board may under a general statute incorporate grounds for terminating the teacher’s contract in addition to those prescribed by statute, and prefer to express no opinion upon that question. I concur in the conclusion reached by Mr¿ Justice Blair.

Ostrander, J.

I concur in affirming the judgment of the court below. I agree with Mr. Justice Blair in the conclusion that the powers of the defendant board of education are sufficiently broad to support the contract in question. It is the import of the opinion, however, emphasized, it seems to me, by the omission to refer in any way to the opinion of this court in Kingston v. School District, 140 Mich. 603, that the contract can be sustained only because the powers of the defendant board of education are greater than those of the.ordinary district board. In other words, the effect of the opinion is that it is not competent in ordinary cases for the school district and the teacher to agree in writing that the contract of employment may be terminated upon 30 days’ notice given by either. So far as the contracts are concerned, the only difference between the one here involved and the one in Coffin v. Board of Education, 114 Mich. 342, are the provisions precisely in question here, viz.: “to dismissal upon 30 days’ notice” and “you will at least give one month’s notice, to the superintendent of intended resignation,” provisions which did not appear in the contract in that case and are in the contract in the case at bar. It is said in the brief of counsel for defendant that the experience of the defendant board in the Coffin Case led to the adoption of the form of contract which is questioned in the present case. I know of no decision of this court in which the rule is laid down that the ordinary school district and the teacher may not contract to terminate the contract upon notice.

Hooker and Moore, JJ., concurred with Ostrander, J.


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    WITT v. DERSHAM.
    1. Sales — Replevin by Buyer — Necessity oe Tender oe Price.
    Where a contract for the sale of hay provides that the buyer shall bale it at once at his own expense and pay a certain price per ton for it when delivered by the seller at the car at a certain station, the buyer cannot maintain replevin for the hay until he has paid or tendered the agreed price unless tender is waived.
    2. Same — Tender—Waiver.
    Where a seller of hay refuses to deliver it according to contract and makes no claim of lien upon it for the purchase price, but instead insists that he has absolute title to it and that the purchaser has no interest in it, his refusal to deliver is equivalent to notice that tender of payment under the contract will not be received and constitutes a waiver of such tender.
    Error to Lenawee; Chester, J.
    Submitted June 13, 1906.
    (Docket No. 110.)
    Decided October 1, 1906.
    Replevin by John P. Witt against George Dersham. There was judgment for plaintiff, and defendant brings error.
    Affirmed.

      H. B. Clark and J. L, O’Mealey, for appellant.
    Smith, Baldwin &A lexander, for appellee.
   Blair, J.

This is an action of replevin for certain hay sold by defendant to plaintiff under a verbal contract, the terms of which are agreed upon except as to the time of delivery. By the agreement plaintiff was to bale the hay at once at his own expense, and was to pay the defendant therefor $8 per ton when the hay was delivered by' defendant at the car in Holloway, a station on the Wabash Railroad. The plaintiff testified that by the agreement the baled hay was to remain in defendant’s barn until such time as plaintiff could procure a car after shipping out three car loads under prior contracts. The defendant testified

“ I said, ‘ If you take the hay right away, you can have the hay, and under no other conditions.’ I said, I don’t want to sell the hay at all and have it laying around in my barn and in the way.’ He agreed to take it just as quick as they were through baling, and then I was to go to drawing; and I said, ‘ You can have it.’ ”

The hay was baled, in accordance with the agreement, some time between the 15th and 20th of October, but plaintiff was unable to procure a car until the 3d or 4th of December. Defendant eventually refused to deliver the hay and offered to pay plaintiff for the expense of baling, though he did not make a technical tender. Thereupon plaintiff began this suit, and took the hay upon the writ and shipped it away. The next day after taking the property on the writ of replevin plaintiff went to the defendant with the money for the hay, something over $109, and tendered it to him.

“He says, ‘ I don’t want it.’

Q. Did he refuse to take it ?

“A. Refused to take it and walked away; turned his back, and walked away.

Q. And you have been ready to pay it; have you got the money to pay him; have you had ever since ?

“ A. Yes, sir; I have.

Q. Ready now ?

“A. I amready now.”

The court instructed the jury that, if they found the facts to be as claimed by the plaintiff, they should find a verdict in his favor; and:

“You will then ascertain the value of this hay at $8 a ton, and from that you will deduct the value of the services rendered by the plaintiff in conveying this hay from defendant’s place to the car, and you will announce to the court the difference between these two values.”

The verdict and judgment were in favor of plaintiff and were entered together. As to defendant’s interest in the property, the verdict and judgment are as follows:

“ And further find that the said defendant, George Dersham, had a lien on said property for the purchase price, amounting to one hundred four dollars, and from that amount shall be deducted ten dollars for drawing the hay. Therefore it is adjudged and determined that the said plaintiff, John P. Witt, do recover against said defendant, George Dersham, his damages aforesaid, assessed at six cents, together with all costs and charges to be taken, and that the said John P. Witt have execution therefor; and it is further adjudged and determined that the said defendant, George Dersham, have a lien on said property and do recover from the said plaintiff, John P. Witt, the difference between the expense of drawing the hay, and the value of said hay, namely, ninety-four dollars, and that the said defendant, George Dersham, have execution therefor. ”

The theory upon which the court proceeded, as shown by his opinion denying a motion for a new trial, was as follows:

“ The question raised by this contract is, Was payment or tender of payment necessary before plaintiff could legally bring replevin ? That is, Is tender or payment a condition precedent to plaintiff’s right to maintain replevin ? I think not. By the terms of the contract, the time for payment was extended to the time when the hay was in the car. In other words, there was a term of credit which did not mature until the hay was in the car. Again, a part of the value of this hay was the delivery of it, and it would be unjust to require the plaintiff to pay or tender that amount, and then be to the expense of delivering it himself. * * * It seems to me that under a contract like this one, where nothing is due until the hay was in the car, that a tender is not a condition precedent to taking the hay with a writ of replevin and placing it in the car. The undisputed proof is that the plaintiff did tender the amount as soon as the hay was in the car, and that it was refused by the defendant, and that this tender was nqt brought into court. However, the judgment entered in this case secures to the defendant his pay for this hay.”

Prior to bringing suit plaintiff had a talk with defendant, who came to see him.

“I told him there in the cornfield that he could have the money on the hay if he wanted it. I didn’t have the money with me, but could get it on short notice. I told him he could have it. I didn’t offer it to him. I didn’t talk money to him any more until after I took the hay. He said to me there in the cornfield that he didn’t come there for money, but to find out how soon I could take the hay away.”

After judgment the plaintiff paid into court the sum of $94, the amount due defendant under the verdict and judgment.

The sole question involved in the case is, as stated in appellant’s brief ;*

“That of the right of the plaintiff in this case to replevin the hay in question without first paying or tendering the purchase price of it to the defendant; there being no term of credit agreed upon and no waiver of such right.”

Under the contract, as claimed by the plaintiff and found by the jury, no credit was given or extended by defendant for the price of the hay. The agreed price was to be paid by plaintiff to defendant at the time of delivery. In the meantime defendant had possession of the hay under his vendor’s lien, which could only be discharged by payment, tender, or waiver. No payment was made, nor was there any lawful tender made prior to bringing suit. Defendant was, therefore, entitled to verdict, unless he had waived a tender of payment. Minear v. Phelps, 112 Mich. 84; Burke v. Dunn, 117 Mich. 430; Wilbur v. Flood, 16 Mich. 40.

It is insisted on the part of the plaintiff that the testimony in the record establishes a waiver of tender on the part of defendant. This question was not submitted to the jury and does not appear to have been raised by counsel nor considered by the court, but, if the evidence conclusively showed a waiver of tender by defendant, the instruction of the court, while based upon an erroneous construction of the contract, was correct in its result. We think the evidence does show such waiver.

Defendant testified:

“The next time I saw him was at my place on Sunday. He said he had some cars at Wellsville and wanted me to draw the hay over there. I told him I didn’t care to draw it there; but, if he would turn in his team and help, I would be ready to go to work the next morning. He said he didn’t propose to help draw the hay. Then I wanted him to pay me for what damage it had been to me and then I should draw the hay myself, and he wouldn’t do that, so I said, ‘That ends it, then.’ * * * About two weeks after the Sunday in question, he came to see me again. At that time he wanted me to draw it to Holloway. I told him I would draw it to Holloway if he would turn in his team and help. He said he wouldn’t do it, so I said, ‘That ends it.’ * * * After he was there the last time mentioned, I think the next time I heard from him was when Mr. Baldwin sent down notice and I came up and talked with Mr. Baldwin and Mr. Clark. Mr. Baldwin said that Witt had agreed to help draw the hay if I was willing to draw the hay now, in that way, to Holloway, and I said I had agreed that I would help draw the hay, and I would draw it if we could get it out right away, rather than go to law about it. I never heard a thing of it. It was 13 days afterwards, then he came and wanted me to draw the hay, and I told him, ‘ No, sir,’ I says, ‘thirteen days ain’t right away.’ When I agreed to draw the hay and let him help draw it, when they said right away, I supposed that meant within a day or two anyway. I had no idea it was going to last 13 days before they would notify me. I then refused to let him have it and told him the hay didn’t belong to him any more. The next I heard of it was when the sheriff came there with them and they took the hay. I had the barn locked, the sheriff ordered me to open it, and I opened it, after he read the paper and bonds that he had given. I told Mr. Witt to keep out in the road until he had a right in there. * * * I was drawing-oats to Holloway at one time when Mr. Witt was there loading oats. After I got through unloading I drove to the car where Witt was putting in his oats and called him to the door and said, ‘ Come up to the store when you get through, and I will pay you for the baling of that hay.’ He came to the door and said, ‘You don’t owe me anything.’ ‘ Oh,’ I says, ‘ all right. I am better off than I thought I was then.’ * * * Afterwards I told him, if he wouldn’t help me draw the hay to Holloway, he couldn’t have it. I refused to draw the hay on the ground that he didn’t take it according to agreement, according to contract. * * * I didn’t say to Mr. .Baldwin that I wasn’t going to let Mr. Witt have the hay because the bargain wasn’t in writing. I said I didn’t consider the hay belonged to him any more. I said the bargain wasn’t fulfilled on his part; that is why I wouldn’t draw the hay. * * * I told him that the contract between Clark and Baldwin up to Adrian had run out and I didn’t calculate to agree to draw this hay and load it here 13 days afterwards, and told him I wouldn’t draw it at all, and told him he couldn’t have it.”

Plaintiff testified:

“ After I had talked with Mr. Baldwin over the telephone I went to Holloway and urged the cars as fast as I could. When the car came, I went right over and notified Mr. Dersham and said to him, ‘ I will be over tomorrow with a team to load that hay;’ and he said ‘ Do not come into my yard, or I will kick you out with the butt end of something.’ This is what he said. Those were the words he gave me. I asked him to deliver the hay and he refused.”

It is clear that throughout the transaction and throughout the trial the defendant was, in effect, denying that he had a lien and insisting that he had the absolute title to the hay and that the plaintiff had no interest in it whatever. His final refusal to deliver was absolute and unconditional and equivalent to notice to the plaintiff that a tender of payment under the contract would not be received and constituted a waiver of such tender. Galvin v. Iron Works, 81 Mich. 16; Jones v. Assurance Co., 120 Mich. 211; Lacy v. Wilson, 24 Mich. 479; 28 Am. & Eng. Enc. Law (2d Ed.), pp. 7-9; Everett v. Saltus, 15 Wend. (N. Y.) 474; Holbrook v. Wight, 24 Wend. (N. Y.) 169.

The error of the court did not prejudice the rights of defendant, and by the payment of the amount due defendant into court he was fully protected.

The judgment is affirmed.

Grant, Montgomery, Ostrander, and Moore, JJ.„ concurred.


text:
    McINTYRE v. E. BEMENT’S SONS.
    Corporations — Stockholders — Repurchase op Stock — Insolvency — Effect.
    Under section 7057, 2 Comp. Laws, a shareholder holding the promise of a corporation to purchase his shares, at his option, cannot enforce the promise after the corporation is in fact insolvent.
    Error to Ingham; Wiest, J.
    Submitted June 13, 1906.
    (Docket No. 82.)
    Decided October 1, 1906.
    Assumpsit by D. Harold McIntyre against E. Bement’s Sons, Detroit Trust Company, receiver, for breach of agreement to repurchase certain corporate stock. There was judgment for defendant on a verdict directed by the court, and plaintiff brings error.
    Affirmed.

      Wilkinson, Post & Oxtoby, for appellant.

      Cahill & Wood, for appellee.
   Ostrander, J.

A verdict and judgment for defendant were directed by the trial court, pursuant to a stipulation of counsel that the jury be discharged and the case disposed of as the court should find the law to be. The action is assumpsit for damages for breach of an agreement which reads:

“D. Harold McIntyre,

Dear Sir: We agree two years from Jany. 1st, 1902, at your option to buy from you the preferred and common stock which we have this day sold you for .the sum of twenty-five hundred dollars, the amount you paid for it.

“Yours truly,

“ E. Bement’s Sons.

“ By Edwin J. Bement, Asst. Secy.”

This instrument was delivered to the plaintiff with the certificates of stock. The time of delivery is left somewhat uncertain. The stock was actually paid for on October 21, and December 11,1901. It is the recollection of plaintiff that the certificates were given him in December, 1901. The certificates of stock and the stockbook evidence a sale in the ordinary manner to a subscriber thereto. Plaintiff held and received dividends on the stock for two years from January 1, 1902. Late in January or early in February, 1904, the exact time uncertain, he exercised his option and called upon the corporation to repurchase the stock. His demand was not refused nor was it complied with. On October 24, 1904, the directors of E. Bement’s Sons filed in the circuit court for the county of Ingham, in chancery, their petition praying for a voluntary dissolution of the corporation. On the same day, the Detroit Trust Company was appointed temporary receiver, qualified, and thereafter continued the business of the corporation; later it was made the statutory receiver. The petition contained the averment that the said corporation “is entirely solvent so far as having abundant assets to meet all its obligations of every kind,” and that its assets were worth more than $1,600,000 and its liabilities were$420,136.61; meaning, of course, liabilities other than capital stock. Later, the assets were appraised at $887,-000, and to a going concern were worth that sum. At forced sale they would bring less than the amount of the corporate debts. E. Bement’s Sons made other like sales of stock, and upon the demand of the purchasers bought back the stock from them. The capital stock of E. Bement’s Sons was originally $20,000, increased February 19, 1901, to $500,000, and on August 7, 1901, again increased to $1,250,000, divided as $500,000 preferred and $750,000 common stock. The last-named increase of capital was subscribed for by O. F. Barnes, Howard Bement, and Edwin J. Bement. As to the preferred stock, it was considered and treated as treasury stock, the sales of which were to be made for, and the proceeds of sales to go to, the corporation. The common stock had been in like manner subscribed for, in form, at least, by stockholders of the company. See Continental Varnish & Paint Co. v. Secretary of State, 128 Mich. 621.

It is the theory of counsel for the appellant:

1. That the sale of stock to plaintiff was a conditional sale. “ He was never a stockholder except under his conditional contract of purchase.”

2. That, by whatever means the corporation acquired control of the stock, plaintiff is to be treated, for all purposes of this suit, as a bona fide purchaser from the corporation of stock which the corporation had legally acquired. An applicable distinction is attempted to be drawn between subscription to stock and sales of stock owned by the selling company.

3. That the record presents no question of the rights of creditors opposed to the enforcement of plaintiff’s contract.

4. That the promise to purchase was valid when given, and cannot be made invalid by the subsequent insolvency of the maker.

Counsel for appellee question the legal as well as the nominal or formal authority of the assistant secretary to make the option contract for the corporation; insist that it is the fact, and is important that the option contract was not made at the time the stock was purchased; that the option. was not exercised at the contract time; that the receiver is not bound, nor is the property of the corporation, by the optio'n contract. The learned trial judge was of opinion that a solvent corporation, unhampered by legislation, may purchase its own stock; an insolvent corporation, in process of dissolution or insolvent to the extent that dissolution is impending, may not do so; that at the time plaintiff elected to change his relations with the corporation from those of shareholder to those of creditor, the rights of creditors had intervened.

Plaintiff did not make a conditional purchase of stock, nor assume the position of stockholder upon condition. Whether he is treated as a subscriber to shares or a purchaser of stock owned by the corporation, he became and assumed to be the holder and owner of the shares of stock of the corporation, entitled to vote, to receive dividends, to transfer his interest as any other stockholder might do. He was absolute and unconditional owner of the stock and it stood of record in his name. He held the contract of the company to buy from him his stock, at his option, after two years, and to pay him for it the sum of $2,500. It would seem that, admitting the contract in question to be valid, the rights of the parties were established at the time plaintiff, acting according to the terms of the contract, elected to sell his stock. If, by such election, his right to be paid $2,500 for his stock accrued, he then and there became a creditor whose right to enforce the legal obligation of the corporation to pay him might be exercised at any time within the period of the statute of limitations. The defendant pleaded, and produced evidence to establish, the fact that on and after October 24, 1904, the corporation was insolvent, in the sense that it was unable to pay its debts as they matured. The act of filing the petition on the day last named is the first act of insolvency proven. It is averred in the petition, however, that the increase of capital to $1,250,000 was for the purpose of paying debts then existing and procuring capital to carry on the business and that the money realized by sale of the capital stock was used to pay a mortgage debt and make improvements and there was left only a small amount to use to run the business; that it was then determined, for the purpose of securing necessary capital, to increase the preferred stock by $250,000, and on December 18, 1902, the issuing of that amount of stock was duly authorized and efforts made to sell the same at par. The inability to sell the additional stock is one of the reasons given for the existing conditions and for liquidation. Plaintiff was, by his proxy, represented at the meeting of December 18, 1902. How his stock was voted does, not appear. I assume, from the evidence stated and from other evidence, that when plaintiff elected in January or February, 1904, to exercise his option, the corporation was, in fact, insolvent, a fact evidently found by the trial court. If the evidence were less conclusive upon this point, I think, for reasons hereinafter given, there is no theory permitting a recovery by the plaintiff which does not require him in this case to establish affirmatively the solvency of the corporation at the time of exercising his option. We are, therefore, not required to determine whether a corporation may, under any circumstances,-lawfully purchase or agree to purchase shares of its stock from a shareholder. The precise question is whether a shareholder holding the promise of the corporation to buy his shares, at his option, may exercise the option and enforce the promise after the corporation is in fact insolvent.

The contention of counsel for plaintiff that if the promise when given was valid, subsequent insolvency of the maker would not make it invalid, is, as to the usual and ordinary contracts of corporations and individuals, sound. But the promise of such a corporation to buy its own stock, if under any circumstances valid, must be considered as made, and accepted with the understanding that the shareholder may not, in face of insolvency of the company, change his relation from that of shareholder to that of creditor, escaping the responsibilities of the one and receiving the benefits of the other. To this rule there appears to be no exception. The cases cited by counsel for appellant expressly recognize the rule. Wisconsin Lumber Co. v. Telephone Co., 127 Iowa, 350 (69 L. R. A. 968); Vent v. Spice Co., 64 Minn. 307. See, also, Melvin v. Insurance Co., 80 Ill. 446; Vance & Jones Co. v. Bentley, 92 Ill. App. 287; Olmstead v. Vance & Jones Co., 196 Ill. 236; Clapp v. Peterson, 104 Ill. 30; Price v. Coal Co., 17 Ky. Law Rep. 865. See, generally, for collection of authorities, 1 Wilgus on Private Corporations, §§ 299-302.

The liabilities of a corporation last to be paid- out of •corporate assets are those represented by the capital stock. The act under which defendant corporation is organized provides (2 Comp. Laws, § 7057) that if the capital stock of any such corporation shall be withdrawn and refunded to the stockholders before the payment of all the debts of the corporation for which such stock would have been-liable the stockholders shall be jointly and severally liable to any creditor in an action founded on this statute to the amount of the sum refunded to him or them respectively. In American Steel & Wire Co. v. Eddy, 130 Mich. 266, a construction was placed upon this provision and reasoning advanced which supports the proposition, not there precisely involved, that it is, in substance and •effect, a limitation upon the power of the corporation to acquire by purchase shares of its stock to the detriment ■of creditors of the corporation. It appearing that plaintiff was a shareholder to the time of exercising his option, that at the time it was exercised the corporation was insolvent, and that if the corporation had then purchased his stock at the price stated, creditors and other shareholders of the corporation would have been prejudiced, there was no legal breach of the agreemeüt to repurchase the stock.

The ruling of the trial court was right, and the judgment is affirmed.

Carpenter, C. J., and Blair, Hooker, and Moore, •JJ., concurred.