text:
    MILLEN v. POTTER.
    1. Specific) Performance — Evidence—Contracts—Corporations.
    Upon a review of the testimony in a stockholders’ suit against a reorganized corporation and its promoters to compel defendants to perform an agreement for the issuance of stock in the new company, field, that the parties entered into a contract in manner and upon terms as claimed hy the complainant and that they were entitled to have strict performance in equity.
    2. Same — Gift.

      Held, further, that the agreement was not one to make a gift.
    3. Same — Statute of Frauds — Stock and Stockholders.
    The contract was not invalid under the statute of frauds, since it did not involve a sale of the stock, hut merely the right of complainants to the stock in the new company which was in equity the property of the complainants when issued.
    Appeal from Washtenaw; Kinne, J.
    Submitted October 22, 1915.
    (Docket No. 75.)
    Decided March 30, 1916.
    Rehearing denied April 21, 1916.
    Bill by Homer C. Millen and another against Nathan S. Potter and another for an accounting, and asking that defendant be decreed to issue certain stock to complainants, and for other relief. From a decree for complainants, defendants appeal.
    Affirmed.

      A. J. Sawyer (A. F. Freeman, of counsel), for complainants.

      Potter & Be Land (Wilson & Cobb, of counsel), for defendants.
   Person, J.

This suit was brought to enforce the assignment and delivery by defendant Potter to complainants of certain stock in the defendant corporation and for the performance of certain other features of an alleged agreement between defendant Potter and Homer C. Millen, one of the complainants.

The Millen Portland Cement Company became an involuntary bankrupt in August, 1909. In October of the same year the Union Bank of Jackson began the foreclosure of a mortgage which covered all the prop-’ erty of the company. On the 1st day of June, 1910, the property was sold under the foreclosure and bid in for the bank by one of its directors. Defendant Potter had before this taken some interest in the affairs of the company, and on the 9th day of July, 1910, he secured from the bank an option for the purchase of all its rights and interest in the propferty accruing from the foreclosure. In September, 1910, he acted upon his rights under the option, and the agreement for the sale and purchase of the property became binding upon both parties. In the meantime he had obtained a deed of all the company’s lands and other assets from the trustee in bankruptcy, and had made arrangements with those creditors of the company who held liens upon its property for the payment of their claims at a greatly reduced figure. Later, and in 1911, he organized the Michigan Portland Cement Company, the other defendant, with authorized capital stock to the amount of $500,000, divided into 5,000 shares of the par value of $100 each. Of this authorized capital $400,000 is in the form of common stock, and $100,000 is preferred stock. According to the articles of association all of the stock had been subscribed, and $50,000 had been paid in on the common stock, and $100,000 on the preferred stock, all in cash. The incorporators were the defendant Nathan S. Potter, his sons, Nathan S. Potter, Jr., Kennedy L. Potter, Clark Zeph Potter, and his daughter, Harriet L. P. Stewart. Of these Nathan S. Potter subscribed for and yet holds 3,500 shares of the common stock and 500 shares of the preferred .stock, while Nathan S. Potter, Jr., Kennedy L. Potter, Clark Zeph Potter, and Harriet L. P. Stewart each subscribed for and holds 125 shares of the common stock and 125 shares of the preferred stock. On the 3d day of November, 1914, defendant Potter conveyed to this new company by warranty deed all of the lands and property received by him through the deed from the trustee in bankruptcy as belonging to the old Millen Portland Cement Company. In and by this deed he especially warranted the property to be free and clear from all rights and claims of the Union Bank of Jackson. And either through defendant Potter personally or through the new company considerable improvements have been made to the cement plant.

The Millen Portland Cement Company, when it went into bankruptcy, owned some 683 acres of land containing beds of marl and other material for the production of cement; and upon this land was a plant with machinery for its manufacture. The company had also a small amount of personal property. The value of all such property must be somewhat problematical, but Mr. Millen testifies that it was worth from $400,000 to $500,000, and his testimony does not seem to be directly disputed in the record. The liens and incumbrances thereon amounted to about $130,000, and the unsecured indebtedness of the old company seems to have been small. The complainants, who are husband and wife, owned a majority of the stock of the old company — that is, of the Millen Portland Cement Company. And, whatever the value of the property may really have been, the old company and the complainants, as owners of a majority of its stock, seem to have had an equity therein of considerable value. Such being the situation, it is the claim of complainants in this suit that in his activities above described Mr. Potter was but carrying out, in part, the terms of an agreement which he had entered into with Mr. Millen, one of the complainants, whereby the new company was to be formed to take over the property of the old company, and the stock of the new company divided in certain proportions between them. As it is the purpose of this suit to obtain such division of the stock and the performance of certain other provisions of the alleged agreement, to be hereinafter mentioned, the important questions to be first determined are whether the complainants are right in claiming that such an agreement was made between the parties, and its terms if it was made. The defendants deny that any such agreement ever existed, and insist that complainants have no interest whatever in the new company, or in its stock.

Inasmuch as the agreement was oral, if there was one, and resulted .from many conferences and interviews between Mr. Millen and Mr. Potter, about which there is much dispute, it would be almost impossible from their testimony alone to come to any satisfactory conclusion as to the result of those conferences and interviews. But there are certain documents and letters which throw much light upon the questions to be determined. It is claimed by complainant that on the 23d day of May, 1910, just before the sale of the property of the Millen Portland Cement Company in the foreclosure proceedings by the Union Bank, Mr. Millen was in the office of defendant Potter, in the city of Jackson, urging him to put their agreement in writing. It is Mr. Millen’s testimony that Potter at this time picked up a large envelope in which mail had evidently been received, and upon the back of it made a memorandum of the principal points in their agreement. Mr. Millen says that he took the envelope home that evening for the purpose of showing it to his wife, and that she, in the presence of a Mr. Coe and himself, copied the memorandum upon a- typewriter, changing it only enough to put it in the form of a contract. Mr. Millen, Mrs. Millen, and Mr. Coe all testify that they read the memorandum on the back of the envelope, that it was in the handwriting of Mr. Potter, that it was compared by them all with the copy made by Mrs. Millen, and that the copy was absolutely correct, except as to such changes only as were necessary to put it in contract form. The envelope, they say, was then thrown away, and Mr. Millen says that he took the copy to Jackson the next morning for the purpose of having it signed. He testifies that, when he showed it to Mr. Potter, the latter said it was correct, but declined to sign it until after the foreclosure sale should have taken place. This memorandum is referred to in the record as Exhibit E, and will be so referred to here. It was never signed, but was produced in evidence, and reads as follows:

“Chelsea, Mich., May 23, 1910.
“N. S. Potter, of Jackson, Mich., party of the first part, hereby agrees with Homer C. Millen, party of the second part, that he will before the 1st day of June, 1910, reorgánize the Millen Portland Cement Company for the purpose of taking over the property of the present company, and that if matters are not satisfactorily arranged before that date that he will buy it. Such company to be reorganized with a capital stock of four hundred thousand common stock, one hundred thousand of preferred stock, and a bond issue of one hundred thousand dollars (100) ; one hundred thousand of the common stock to go with bonds, one hundred thousand common stock to remain in the treasury of the company to be given as necessary with the preferred stock, the remaining two hundred thousand common stock to be equally divided between N. S. Potter, N. Potter, and H. C. Millen; N. Potter to have the management of the plant, and H. C. Millen to have entire charge of the sales department, with an office in the village of Chelsea, both named parties to draw a salary of $3,000 for the first year.”

Mr. Potter admits having made some figures upon the bacK of an envelope, but he says that they were not of the character contained in the alleged copy, and that they were not intended to be minutes of any agreement. Its purpose being in dispute, this paper, standing alone, would not very greatly assist us, but, in connection with other writings, it becomes important.

It seems that Bernard B. Selling, as trustee, held a mortgage for $5,000 upon the property of the Millen Portland Cement Company which necessarily had to be taken care of in reorganizing the business and transferring the property to the new company. Mr. Selling had also an unsecured, claim against the old company, and on the 14th day of July, 1910, he, as party of the first part, and defendant Potter, as party of the second part, entered into a written agreement by the terms of which Potter was given an option to purchase these claims within a certain time and at a certain price. But the important part of this agreement, so far as this case is concerned, consisted of certain provisions for securing payment to Mr. Selling, and to a firm by the name of Lehman & Riggs, of certain indebtedness, by means of stock which would come to Mr. Millen when the new company should be organized. This contract bears Mr. Potter’s own signature and cannot be ouestioned. It reads in part as follows:

“It is further provided that the option hereinbefore described as given by said first party to said second party is conditional upon the signing by Homer C. Millen and May Millen of an order on the said second party in favor of the said first party for his benefit and the benefit of Lehman & Riggs, a true copy of which order is hereto annexed and marked Exhibit A, the signature to which said contract or order shall be affixed by said Homer C. Millen and May Millen and said second party to this agreement at the time of or before the acceptance of said option, and such contract or order shall thereupon be delivered to said first party.”

And the Exhibit A referred to in and attached to the contract reads in this way:

“Agreement made this-- day of-, A. D. 1910, by and between Nathan S. Potter, of Jackson, Michigan, hereinafter referred to as party of the first part, Bernard B. Selling, of Detroit, Michigan, hereinafter referred to as party of the second part, and Homer C. Millen and May Millen of Chelsea, Michigan, hereinafter referred to as parties of the third part, witnesseth:
“Whereas, the said first party has undertaken the reorganization of the Millen Portland Cement Company, in which said company the said second party has an interest, and an agreement has on July 14, 1910, been made between the said first and second parties, whereby an option has been given to the said first party upon the interest of the said second party in the said Millen Portland Cement Company and any claims against it; and
“Whereas, the said second party has a claim for three thousand dollars and accrued interest against the said third parties, represented by promissory notes bearing date July 23, 1908; and
“Whereas, Lehman & Riggs, of the city of Detroit, Michigan, have a claim also against the said third parties in an amount in excess of $3,000 with accrued interest, represented by promissory notes; and
“Whereas, in the reorganization of said Millen Portland Cement Company and in the formation of the said new company the said third parties have a tentative agreement with first party whereby said third parties may receive an amount in common stock to the amount of $20,000 or more, par value:
“It is hereby agreed that, if the said first party avails himself of the option given by said second party in the instrument bearing date herewith and herein-before described, then and in such case there shall be issued out of the stock (if any) which may be coming to the said third parties, or either of them, upon such reorganization, in said new company, two (2) certificates of stock of the par value of $10,000 each of common stock, one of which certificates of $10,000 is to be held as collateral by the said second party on his claim against the said thifd parties upon the promissory notes hereinbefore referred to, and the other certificate of $10,000 is to be held by the said second party, as trustee for said Lehman & Riggs, attorneys, for the payment of the notes held by said Lehman & Riggs against said third parties, such collateral to be held by the said second party for three (3) years, and the said third parties are to have the right to redeem such collateral by the payment of said promissory notes to the said second party and to the said Lehman & Riggs, with the interest due thereon, at any time within said three years.
“And the said first party hereby agrees that in case he avails himself of the option hereinbefore referred to given to him on July 14, 1910, by written contract between himself and the said second party, he will, out of any stock which may be coming to either or both of the third parties hereto, directly or indirectly, cause to be placed in the hands of said second party valid certificates of common stock in such reorganized company in the sum of $20,000 for the purposes herein-before described, if such amount be coming to either or both of said third parties, and said third parties hereby instruct said first party so to do.
“Witness the hands and seals of the parties to this agreement the day and year first above written.”

It seems that Exhibit A was not signed by complainants because of an objection which they had to the provision in favor of Lehman & Riggs, and that its place was taken by the following order and acceptance which were also given in evidence, to wit:

“Jackson, Mich., August 6, 1910.
“To Mr. N. S. Potter,
“Jackson, Mich.
“Dear Sir:
“Whereas; it is contemplated by you to reorganize the Millen Portland Cement Company and to form a new corporation to take over the same, you are, for a valuable consideration, hereby instructed and ordered to turn over to Bernard B. Selling, of the city of Detroit, Wayne county, Michigan, common stock of the par value of $10,000 of said new company as soon as issued, to be held as security for the prompt payment at maturity of a promissory note bearing date August 1, 1910, in the sum of $3,000.00, to the order of Bernard B. Selling, payable three years from date, with interest at the rate of five (5) per cent, per annum, payable semi-annually. There shall be no right to foreclose said pledge until August 1, 1913.
[Signed] “Homer C. Millen. [L. S.]’
“For and in consideration of one dollar and other valuable considerations, I, the undersigned, do hereby accept the above order, the said stock to be delivered to the said Bernard B. Selling out of any stock that may hereafter be coming to the said Homer C. Millen in said new corporation to be formed when such corporation is formed. [Signed] N. S. Potter.
“Dated Jackson, Michigan, August 8, A. D. 1910.”

The following letter was also produced at the hearing, written at a still later date, by Mr. H. S. Holmes, a banker at Chelsea, to defendant Potter:

“Chelsea, Michigan, Jan. 2, 1912.
“Mr. N. S. Potter,
“Jackson, Mich.
“Dear Sir:
“If you can arrange with Mr. Millen so as $25,000 of par value of Mich. Portland cement stock can be issued to me when time comes and to be assigned to the Millens on payment to me of $1,883.00 dollars with interest at 6%, I am inclined to assist him at this time. He says you are inclined to guarantee no loss on acct. of your faith in the stock of Michigan Portland. If so I would feel I would be all right some time. Wishing you the compliments of the season, etc,
“I am yours, etc., H. S. Holmes.”

And upon the back of this letter is the following indorsement by Mr. Potter, and in his handwriting:

“I will reserve $25,000 par value common stock as collateral for you conditioned that when stock is delivered to you, you pay such advances as I have made represented by Millen’s note dated Dec. 22, 1911, $759.45 with int. 6% or any renewals of said note.
“Jan. 2, 1912. N. S. Potter.”

It is true that none of these writings contain a direct agreement between Mr. Potter and Mr. Millen, but they are consistent only with the existence of such an agreement. In Exhibit A, attached to the Selling contract of July 14, 1910, is the affirmative statement that a tentative agreement existed between Potter and the Millens, whereby the latter might receive common stock in the new company to the amount of $20,000 or more. This is directly contradictory to Mr. Potter’s testimony that there never was any agreement between the parties as to stock in the new company. It is apparent that this agreement was “tentative” in the sense only that the property might never be acquired or the new company formed. The amount of the stock is given at $20,000 or more, because that was the amount called for by the Selling contract and all that Selling was interested in. The indorsement upon the Holmes letter whereby Potter was to reserve $25,000 of the stock going to the Millens, as security for the indebtedness to Holmes, was made long after the new company had been actually organized. Mr. Potter’s explanation that he was only intending a donation of stock to the Millens does not seem to accord with the situation. We are constrained to believe, and to find, from the foregoing evidence, that there was an agreement between Mr. Millen and Mr. Potter relative to the organization of the new company and the distribution of its stock, and that the memorandum written by Potter on the envelope and copied by Mrs. Millen into Exhibit E was intended to state and did state certain material terms of that agreement. This being true, it is clear that Mr. Millen was to receive one-third of $200,000 par value of the stock of the new company upon its organization, or, in other words, 666 2/3 shares of the stock.

It is not claimed that the memorandum Exhibit E contains all the details of the agreement between the parties. Mr. Millen testifies, in substance, that he was to assist in securing a discount of the claims against the old company; that he was to prevail upon the creditors of the old company, as far as possible, not to redeem from any sale that might take place; that he was not himself to take-any steps towards redemption, and. that he was to assist, so far as he could, in obtaining transfers of the property to the new company. His statement as to the part he was to perform under the agreement is undoubtedly correct; for it is consistent with the memorandum made by Potter, and the evidence shows that he was active in the matter throughout. He insists that he fully performed his part of the agreement, and, although Mr. Potter denies the alleged effectiveness of some of his work, yet Mr. Potter’s defense is, not that Millen failed to perform his part, but that there was not any agreement. In finding that there was an agreement, it is impossible, under the circumstances, to avoid finding that Millen performed his part of it. This being true, why should he not have such relief as can properly be given him?

It is probably true that a court of equity would refuse to attempt the enforcement of such a contract as was entered into by Mr. Millen and Mr. Potter if the contract had not already been largely performed by the parties. But this suit was not brought to obtain the specific performance of the contract as a whole. The new corporation has been organized, the liens and incumbrances upon the property have been satisfied and removed, and the property has been transferred to the new company. The warranty deed from Mr. Potter must operate, not only as a transfer of such title as he received from the trustee in bankruptcy, but also as a transfer of his interest in the contract with the bank. The terms of the contract, so far as it has been performed, are made certain by the performance. That portion which is to be performed is made definite by the memorandum. There seems to be no good reason why a court of equity should not decree that Mr. Millen’s share of the stock should be turned over to the complainants; for Mrs. Millen, it seems, has acquired an interest in the agreement, and in the stock, by virtue of various contracts with her husband. This was the view taken of the matter by the circuit judge, and we think it is a correct view.

But it is urged on behalf of defendant Potter that certain terms of the contract as set out in the memorandum are illegal as against public policy, £tnd that their illegality so affects the entire contract that no portion of it can be enforced. Reference is had in this behalf to the provisions that N. Potter should have the management of the plant and Mr. Millen the entire charge of the sales department. On the other hand, counsel for complainants insist that these -provisions are legal and should be enforced. We agree with counsel for defendant that such provisions may be against public policy under some circumstances. But it is not necessary to inquire whether they would be in this instance, because they are too indefinite to have any real meaning. No period of time is mentioned during which either young Mr. Potter should have the management of the plant or complainant Millen have control of the sales department. Their continuance in office seems left entirely to the judgment of the board of directors. In saying that complainant Millen’s salary should be $3,000 for the first year, we understand the agreement to mean that his salary should be at that rate for the first year if he remained in office. A contract will not be so construed as to make it illegal if such construction can be reasonably avoided. Thus considered these provisions do not prevent a decree requiring their portion of the stock to be turned over to complainants.

The contract, it is true, was oral, but the statute of frauds is not involved. Complainants are not seeking to enforce a sale of stock from defendant Potter to themselves; for the stock rightfully belonged to them when it was issued. Nor is there any attempt to enforce a conveyance of land from defendant Potter to the new corporation, inasmuch as he has already made such conveyance by deed with full covenants of warranty which carries with it all his rights under the contract with the. bank. It appears, however, that a portion of the purchase price named in the contract has not yet been paid. The trustée who holds title for the bank testified that he was ready to make conveyance according to the terms of the contract whenever this balance of the purchase price should be paid. The circuit judge was right in incorporating in' the decree a provision directing that defendant Potter complete this payment.

In the organization of the new company it is clear that defendant Potter departed somewhat from the agreement as set forth in Exhibit E. He himself, with others, subscribed for all of the stock, instead of issuing bonds and disposing of a portion of the common stock with such bonds, and a portion with the preferred stock. The complainants have assented to these changes by demanding their proportion of the common, stock in the company as organized, and by doing so some questions discussed in the briefs of counsel are rendered unimportant.

Upon the whole record the decree made by the circuit judge seems just and equitable, and it will be affirmed, with costs to the complainants.

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


source: Caselaw Access Project

author: Brooke, J.

license: Public Domain

text:
    DETROIT FIREPROOFING TILE CO. v. VINTON CO.
    1. Contracts — Profits—Damages.
    Profits, to be recoverable in an action for breach of contract, must have been within the contemplation of the parties when they entered into the agreement. They must be of such a certain and probable nature as not to be speculative or dependent on doubtful contingencies, and the amount thereof must be provable with reasonable certainty.
    2. Same — Evidence.
    Proofs examined and held, not to warrant the submission of the question of plaintiff’s damages to the jury, based on evidence of lost profits.
    Error to Wayne; Barton, J., presiding.
    Submitted October 18, 1915.
    (Docket No. 45.)
    Decided March 30, 1916.
    Assumpsit in justice’s court by the Detroit Fireproofing Tile Company, a corporation, against the Vinton Company, a corporation, for breach of contract of sale. From a judgment for plaintiff defendant appealed to the circuit court. Judgment for plaintiff for an insufficient amount. Plaintiff brings error.
    Affirmed.

      George W. Bates, for appellant.

      Sherman D. Callender, for appellee.
   This suit originated in the justice’s courts of the city of Detroit. It appears that on the 13th day of June, 1910, the plaintiff entered into a written contract with the defendant to furnish and erect complete the masonwork as shown on the plans and called for in the specifications for a factory building for the Breeze-Detroit Carbureter Company, to be located on Campbell avenue, for the sum of $1,875. The contract is a long one, and among other things requires the subcontractor (plaintiff) to supply architects and superintendent—

“with all desired means and help for safely inspecting the various parts of the work, and the subcontractor shall render every necessary and suitable assistance to the architects at all times when required to take measurements, levels, etc., on work or grounds as the case may be. * * *
“To save the owner and general contractor [defendant] harmless from all damage that they may sustain or be subjected to by reason of any negligence on the part of or the acts of the subcontractor [plaintiff] or any of subcontractor’s employees, laborers, or servants, or by reason of, any breach on the part of the subcontractor of any of the provisions of the agreement. * $ * '
“The subcontractor [plaintiff] shall not be entitled to any payment without a certificate signed by the architects and superintendent stating that such sum is due. * * *
“Neither payment made on the work during its progress nor occupancy of the building by the owner, whether partial or entire, shall in any case be construed as an acceptance of the same. * * *
“The subcontractor [plaintiff] shall procure and deliver to the general contractor a surety company’s bond satisfactory to the general contractor, * * * conditioned for the furnishing of material and performing the labor on said building free from all liens. * * *
“The subcontractor agrees to pay his proportion of the insurance, watchman, permits for occupying the streets, and water tax; also to do all work called for both in the printed and typewritten general conditions which pertains to the subcontractor’s part of the work.”

Upon the trial it appeared that this written contract was entered into by the parties before the defendant, the general contractor, had secured its own contract, and circumstances thereafter arose which made it impossible to erect the building. On September 1, 1910, the defendant wrote the plaintiff to the effect that another company had purchased the property on which the Breeze-Detroit Carbureter Company intended to build, and requested plaintiff to remove such material as plaintiff already had upon the ground. In the meantime plaintiff had entered upon the execution of the contract. Complying with the request of defendant, plaintiff removed the material from the ground and rendered a bill to the defendant for the sum of $150. This bill the defendant declined to pay, but offered in adjustment of the matter the sum of $75, which was refused. After a lapse of more than two years this suit was brought in the justice’s courts. Plaintiff filed the following bill of particulars:

Contract price ....................... $1,875.00

Estimate of actual cost of construction. 1,453.51

Damage ...................................... $421.49

Additional items of damage after cancellation by Vinton Company:

Teaming materials, wbicb bad been delivered, from job ................................... 24.75

Cost of labor in reloading materials for transportation from job .......................... 4.03

Surveying .................................... 10.00

Blocks used and not returned ................ 5.20

Total ....................................... $465.47

From a judgment in the sum of $280 rendered in the justice’s court, defendant appealed to the circuit court, where proofs were taken at large.

Plaintiff introduced evidence tending to show the number of concrete blocks required to carry out the contract, the shop cost of each block, the cost of delivering the same to the works, and the cost of laying them up. Testimony was likewise introduced on its behalf tending to show that various items entering into this contract would have been performed by other subcontractors,under it, and that those subcontracts could have been let at certain specified sums. Adding these sums to the cost of manufacturing, hauling, and laying up the concrete blocks, plaintiff arrived at a total estimated cost of the building of $1,453.51. Deducting this ampunt from the contract price, $1,875, leaves a balance of $421.49, which plaintiff claimed the right to recover as profits, or damages, by reason of the breach of the contract on the part of the defendant. At the close of the proofs a motion was made by the defendant that a verdict be directed in favor of plaintiff for the amount $43.98, being the amount of plaintiff’s bill of particulars, less the sum of $421.49, the estimated profits. After argument defendant’s motion was granted, and judgment was entered in accordance therewith.

Plaintiff now reviews the case in this court, claiming that under the proofs it was entitled to go to the jury and have the jury assess its damages under the evidence.

Brooke, J.

(after stating the facts). The difficulty in the case arises in determining the measure of damages to be applied, it being conceded that plaintiff is without fault, and the breach of contract on the part of the defendant entitled plaintiff to recover whatever damages it may lawfully show. It is the contention of the plaintiff that under the evidence this loss was shown with such reasonable certainty as the law requires, and counsel cite in support of that position the following cases: Loud v. Campbell, 26 Mich. 239; Leonard v. Beaudry, 68 Mich. 312 (36 N. W. 88); Fell v. Newberry, 106 Mich. 542 (64 N. W. 474); Barrett v. Veneer Works, 110 Mich. 6 (67 N. W. 976); Industrial Works v. Mitchell, 114 Mich. 29 (72 N. W. 25).

On behalf of defendant the following cases are cited: Allis v. McLean, 48 Mich. 428 (12 N. W. 640); Talcott v. Crippen, 52 Mich. 633 (18 N. W. 392); Stevens v. Yale, 113 Mich. 680 (72 N. W. 5); Quay v. Railway Co., 153 Mich. 567 (116 N. W. 1101, 18 L. R. A. [N. S.] 250); and Herron v. Raupp, 156 Mich. 162 (120 N. W. 584).

The general rule deducible from the authorities is stated as follows (13 Cyc. p. 36):

“In order to recover profits in case of a breach of contract, such profits must have been within the contemplation of the parties at the time that the contract was made, and, where such profits do not enter into the contract itself, they will be denied. Anticipated damages, different from those which would ordinarily be sustained, are not always recoverable, but will only be awarded when in view of special circumstances they may be regarded as the natural and direct result of the breach, and are hot problematical, but are capable of being foreseen and of being estimated with reasonable accuracy. In all cases the damages claimed should be capable of being definitely ascertained. Where the damages claimed are so speculative and dependent upon numerous and changing contingencies that their amount is not susceptible of actual proof with any reasonable degree of certainty no recovery can be had.”

See, also, 8 Am. & Eng. Enc. Law [2d Ed.], p. 622.

The question still remains whether plaintiff produced evidence from which the jury might estimate its loss with reasonable accuracy.

The record discloses that in estimating the cost no account was taken of the overhead expenses, such as salaries of president, manager, superintendent, bookkeeper, stenographer, etc. All these administration expenses were not included in plaintiff’s estimate as to the cost of the job, nor in said estimate was there included any allowance for the expenses and proportionate share which under the contract the plaintiff was obliged to bear for insurance, watchman, permit for occupancy of streets, and water tax. It further appears that plaintiff intended to perform a portion of the work under its contract by subletting the same to subcontractors. Among the items so to be performed were the following: Excavation estimated by plaintiff to cost $90; concrete floor estimated by the plaintiff to cost $520; coal chute estimated by plaintiff to cost $5; and sewer estimated by plaintiff to cost $45. The record does not disclose that subcontracts were let by the plaintiff for these various portions of the work; but it does show that plaintiff’s general manager, Raymond, gave the various items above set forth, and testified that, in his opinion, the sums mentioned would have represented the cost of doing the various jobs specified.

After a careful consideration of the entire record, and the cases in our own court bearing upon this question, we are of opinion that the plaintiff failed to introduce testimony from which .the jury could intelligently and with reasonable accuracy determine the actual loss of profits (damages) suffered by the plaintiff by reason of the unwarranted breach of the contract by defendant.

The judgment will stand affirmed.

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


author: Steere, J.

text:
    J. A. FAY & EGAN CO. v. CUMMER MANUFACTURING CO.
    1. Sales — Breach of Warranty — Return of Property — Waiver —Acceptance.

      Held, in a suit for the balance of the price of a multiple crate slat molder, that plaintiff, under disputed evidence, did not waive a written proviso in the contract of purchase that defendant should not retain the machine more than 30 days if not satisfactory and such retention would amount to an acceptance.
    2. Same — Return.
    And mere notice of defendant’s dissatisfaction or of defects would not relieve the party from complying with such requirement and condition.
    3. Same — Warranty.

      Held, also, that the evidence sufficiently established that the seller orally warranted that the machine would continue to work satisfactorily and if it did not' he would see that it did.
    4. Same — Notice—Pleading.
    Notice with defendant’s plea that it would rely on- a waiver of the provision relating to retention of the machine more than 30 days by subsequent promises and agreements, sufficiently-advised plaintiff that after the making of the. sale, but before delivery, plaintiff agreed that it should work properly or he would make it all right.
    5. Same — Damages.
    Where the lower court did riot find the value of the machine sold or any of the items of damage, except one, a judgment for defendant for much more than the item found was not supported by sufficient evidence, the evidence not showing what the machine was worth.
    6. Same — Profits.
    And anticipated profits or possible losses from the operation of the machine, being -speculative and uncertain, were not -recoverable.
    7. Same — Measure of Damages.
    The damages should have been based on the difference between the value of the machine that was furnished and the contract price of the one it was agreed to be delivered.

      Error to Wexford; Lamb, J.
    Submitted October 19, 1915.
    (Docket No. 162.)
    Decided March 30, 1916.
    Assumpsit by J. A. Fay & Egan Company, a foreign corporation, against the Cummer Manufacturing Company, a corporation, for balance of purchase price of a certain machine, before the court without a jury. Judgment for defendant. Plaintiff brings error.
    Reversed.

      Gaffney, Miltner & Millington, for appellant.

      A. W. Penny, for appellee.
   Steere, J.

This action was brought to recover a balance of $222.86 claimed due from defendant upon the purchase price of a certain machine called a “multiple crate slat molder,” sold it by plaintiff under a written contract entered into between the parties on March 19, 1913. Plaintiff is a corporation located at Cincinnati, Ohio, engaged in the manufacture of woodworking machinery, and defendant is. a corporation owning and operating a factory located at Cadillac, Mich., engaged in the manufacture of products of wood, including crate slats, and, presumably, crates, although the record refrains from disclosing the latter fact, except as it may be inferred from the statement of defendant’s president that: “When our business is up to capacity we can use over 200,000 [slats] a day.” The agreed price of the machine with specified extras was $1,310, of which $710 was paid in advance, the balance in three payments of $200 each in two, four, and six months with 6 per cent, interest. The contract, which was preceded by considerable correspondence between the parties, initiated by plaintiff, is in the form of an accepted order given by defendant, which was prepared by plaintiff at Cincinnati. The word “we” is used in it loosely to represent whichever corporation the writer may have had in mind, but •counsel do not disagree as to which, is to be inferred. So far as material, it is as follows:

“March 13, 1913.
“J. A. Fay & Egan Co.,
“Cincinnati, Ohio:
“Subject to strikes, accidents, or other delays beyond your control, please ship in good order the following machinery, delivered f. o. b. Cincinnati, Ohio, about May 1, 1913: One No. 353 multiple crate slat molder complete with upper and lower slotted heads, middle' box on upper spindle to be 8 inch fitted with bits and with one separate arbor carrying 16 saws for dividing the boards and with countershaft. * * *
“We [plaintiff] warrant the machine to be free from defects in material, and if any part of it breaks from defects that show a flaw within five years, we will replace it with a new part. That it will make your sample slats, in a first-class manner, at about 50 feet per minute, and 15 of them at one time, and to do this continuously, provided it is kept in. proper condition and is properly operated. This machine to be of our latest type. For which we [defendant] agree to pay within the time stated below thirteen ihundred and ten dollars. * * *
“The above-described property shall be kept and used at Cadillac, in Wexford county. State of Michigan, and it is agreed that title to said property shall remain in J. A. Fáy & Egan Company until fully paid for in cash; that in case of rejection the undersigned will promptly deliver it to the consignor f. o. b. Cincinnati, Ohio, that this contract is not modified or added to by any agreement not expressly stated herein, and that a retention of the property forwarded, after thirty days from its arrival at destination, shall constitute a trial and acceptance, be a conclusive admission of the truth of all representations made by or for the consignor, and a fulfillment of all its contracts of warranty éxpress or implied. It is further agreed that the purchaser shall keep the property fully insured for the benefit of the J. A. Fay & Egan Company; that said machinery shall not become a fixture to any realty on account of being annexed thereto, and in case default is made in the payment of one or more of the aforesaid notes or sums of money this contract shall at the option of J. A. Fay & Egan Company be forfeited and determined, and all payments theretofore made shall be forfeited as compensation for use of said machinery and as liquidated damages, and J. A. Fay & Egan Company shall have the right to take away said machinery.”

Plaintiff declared generally upon the common counts in assumpsit with a special count for the balance claimed yet due on the contract.

Defendant, under a plea of general issue, gave special notice of a counterclaim by way of recoupment with damages itemized to the amount of $1,200, and further notice of various matters of special defense stated at length, relating chiefly to claimed defects and failure of the- machine to do the work for which it was designed, alleging, among other things:

“That prior to and upon the execution of said contract said plaintiff was fully informed of the character and kind of service for which said machine was purchased, and expressly agreed that the warranty reading in part as follows: ‘That it will make your sample slats in first-class manner at about 50 per minute, and 15 of them at one time, and to do this continuously, provided it is kept in proper condition and is properly operated’ — should operate and remain in force continuously during the reasonable life of the machine, and it was agreed that the word ‘Continuously’ should be construed to have such meaning and-intent. That the provision in the printed portion of said agreement that a retention of the machine for 30 days should constitute a fulfillment of warranty was by agreement of the parties to have no force and effect, and superseded by the word ‘continuously’ contained therein, and, if that the same had any significance to plaintiff, it waived the same by its subsequent promises and covenants and doings here enumerated.”

The case was tried before the court without a jury. Findings of fact with conclusions of law thereon were made by the court, and a judgment was rendered in favor of defendant for the sum of $875, under its claim of recoupment.

Plaintiff’s assignments of error as urged'and argued by its counsel and stated in their briefs are that the court erred:

(1) In admitting the testimony of what occurred prior to and contemporaneous with the contract to vary or alter its provisions; (2) in receiving evidence of what occurred after the execution of the contract because of failure of the defendant to give notice therefor; and (8) in its findings of law and facts because based upon incompetent testimony and without authority of law.

The following portion of the court’s finding of facts and conclusions of law will serve to an understanding of the issues and the subjects to which plaintiff’s assignments of error relate:

“(4) The machine was not constructed and delivered within the time stated in the contract, and was delivered to the defendant company somewhere between the first and middle' of July, 1913.
“(5) After the • contract, had been executed and the machine was in process of construction H. H. Cummer, president of the defendant company, was at the plaintiff’s plant; saw the machine in process of construction. He went over the matter with Mr. Egan, of the plaintiff company; told him that the machine was too light. Mr. Egan, in consideration of the desire of the plaintiff to overcome the prejudice of the defendant against the J. A. Fay & Egan Company machines, told Mr. Cummer to retain the machine when delivered and not return it, and that the plaintiff company would make it conform to the guaranty in the contract for and during the life of the machine.
“ (6) This machine was considered by both the contracting parties to be a machine made to order for special work incident to defendant’s business, and was not considered as a standard or stock machine. The preliminary correspondence shows that the plaintiff would not make the machine unless half of the amount was paid down before trial of the machine.
“ (7) On the 29th day of July, 1913, after the machine had been received and set up, the defendant informed the plaintiff that there had been a mistake made in the construction of the machine, in this, that the cones in the Countershaft were out of line with the feed cones, on the machine, and that the machine could not be operated in that way. Either by reason of faulty design or error in construction, it became necessary to set the countershaft out of alignment with the feed shaft between two and three inches in order to take advantage of the different speeds on the machine. If the countershaft was set in alignment with the feed shaft, the frame of the machine interfered with the belt. If set out of alignment, the machine can be worked on the different speeds, but at the expense of the belt connecting the two pulleys that are working out of alignment and at cross-purposes.
“(8) After some correspondence about the matter the plaintiff on the 8th day of September, 1913,. sent its Mr. Frost to adjust the machine and get it working to the entire satisfaction of the defendant. To get the machine to run Mr. Frost had to and did place the countershaft out of line with the shaft on the machine some two or three inches. As. so adjusted, the machine would work, but soon ruined the belt running from the pulley on the countershaft to the pulley on the feed shaft. Nor was this difficulty obviated by the use of a narrower belt, as suggested by Mr. Frost. A narrow belt was tried after Mr. Frost left, but it would still climb on the flange, and the result was a ruined belt.
“(9) At no time has the machine worked to the satisfaction of the defendant, nor has it at any time even approximated the amount of work that it was guaranteed to do. When adjusted to cut seven-eighths inch slats, the outfeed would not work, and could not be adjusted to work on the thinner stock. Some parts of the machine proved too light by construction to stand the strain when put to the test, showing that the objection raised by Cummer in his interview with Mr. Egan while the machine was in process of manufacture was well taken. These, along with other matters, were called to the attention of the plaintiff, but no effort has been made to remedy them or any of them.
“(10) From the very first the defendant has maintained that there is a mechanical defect in either the design or the construction of this machine, which makes it necessary to adjust the countershaft out of alignment with the feed shaft, and this has caused the most of the trouble and has kept the parties from getting together. The plaintiff has as persistently maintained that the design is correct, and that the machine was built accordingly, and that there is no mechanical defect in the construction of the machine. From the testimony submitted the court is satisfied that the design was faulty to begin with, or that the construction does not follow the design, and, further, that the necessity for the adjustment of the countershaft out of alignment with the feed shaft is but a makeshift to overcome the inevitable result of such faulty design or error in construction.
“(11) The defendant, on receiving the machine, set it up in accordance with the blueprint furnished by the plaintiff. It was tried, and would not work satisfactorily. It was left in the same condition until Mr. Frost came.
“ (12) The defendant has kept the machine, and has never offered to return it to the plaintiff; neither has the plaintiff offered to correct the mechanical defect in the design or construction of the machine; nor has the plaintiff done or offered to do anything to make the machine work, except what Mr. Frost did on September 9, 1913.
“(13) From time to time, and on its own initiative, the defendant has put in some new parts, had others remilled and replaced, and put in new and heavier parts where those on the original machine were not right or were too light, and did all this without putting it up to the plaintiff, and without making any request to the plaintiff to do the same or any part of it.
“(14) The machine was set up and operated by competent men and under competent supervision. Mr. Cummer is a natural mechanic, and has' invented, designed, manufactured, and operated machinery and mechanical devices for upwards of 30 years. This machine was set up and operated under his general supervision.
“(15) If the plaintiff is entitled to recover as per the terms of the contract, there is due" and unpaid the sum of $222.86.
“ (16) The value of the work and materials and new parts put on the machine by the defendant is $233. “Conclusions op Law.
“(1) The written agreement between the parties contains all the essential elements of a contract, and must govern their rights, unless the provisions of the contract, or some of them, have been waived or changed by subsequent' agreement or by conduct inconsistent ■ with the express conditions thereof. In my judgment, there is no ambiguity in the conditions-of the contract as made on March 19, 1913, and that it clearly expresses the minds of the parties at that time. The word ‘continuously/ as therein used, has a well-defined meaning, and in the connection in which it is found in the contract under consideration, if it has any purpose there at all, it means, that that part of the warranty was intended to continue during the reasonable life of the machine. No testimony of what took place between the parties prior to or contemporaneously with the making of the contract was admissible to vary, change, or explain the meaning of the terms and conditions thereof.
“(2) In view of the conversations, correspondence, and conduct of the parties subsequent to the making of the contract, I am satisfied that the plaintiff company waived its right to insist on the 30-day limit. Before the 30 days were up the defendant notified the plaintiff that there had been an error made in the design or construction of the machine, and that it could not be run in that way. The main question that has been uppermost all the way through was right here raised. It was put up to the plaintiff to make it right. The testimony in this connection brings this case plainly within the decision of the Supreme Court of this State in Randall v. J. A. Fay & Egan Co., 158 Mich. 630, (123 N. W. 574)."

Early in the progress of the trial it was suggested by the court, on the occasion of an objection to certain proposed evidence, that the testimony be taken subject to objections offered, and “the court, after considering the law, determine the admissibility of it afterwards in his findings,” to which counsel agreed with the understanding that exceptions to adverse rulings were also reserved.

In its conclusions of law the court held inadmissible all testimony of “what took place between the parties prior to or contemporaneous with the making of the written contract” to change, or explain, the meaning of its terms or conditions, and found that it contained the essential elements of a contract which must control and govern the rights of the parties, unless its provisions, or some of them, were subsequently changed or waived by mutual agreement or conduct.

At the time of the trial, in April, 1915, defendant still had the machine, and, as defendant’s president, Mr. Cummer, testified, was running it with a 4%-inch belt. If the written agreement governed, the retention of the machine by defendant longer than 30 days after receiving it in ^Cadillac, during the early part of July, 1913, constituted a trial and acceptance, and “a conclusive admission of the truth of all representations made by or for the consignor, and a fulfillment of all its contracts of warranty express or implied.” The only conduct of waiver of this provision suggested in the finding of the court, or that ,we discover in the testimony, is the sending of Mr: Frost to Cadillac in September, 1913, to adjust the machine and put it in working order; but the conditions under which he was sent negative a waiver. In response to defendant’s complaint by letter that the machine did not work satisfactorily and request that plaintiff “send a man who understands the machine to investigate it and set it going properly,” plaintiff replied on August 22, 1913:

“If you will go over the contract that we have with you, you will see that it says nothing about the guaranteeing of the erection of the machine. * * *
“We, of course, will take pleasure in having one of our experts come up to your city and show you how to set it up, adjust it, and run it, if you desire, but, as this is entirely foreign to our contract, we would expect you to stand all of his expenses connected with such a trip, namely, hotel expense, railroad fare, and six dollars per day for the expert from the time he leaves our works until he returns.”

And on September 8th, in reply to a letter from defendant of September 5th:

“To set aside any doubt that the machine is not perfect and to avoid any further arguments, we are tonight sending our Mr. Frost to Cadillac to readjust your machine, and as outlined in ours of the '3d inst. * * * We know Mr. Frost will promptly put your machine back to where it was when it left our works, * * * and we believe he will give your operators some instructions that will be well worth the cost of the expense to you.”

Neither do we find anything by plaintiff in the rather protracted and controversial correspondence between the parties subsequent to the written agreement waiving its right to insist upon the 30-day limit, or consenting to any change in the terms of that contract. On the contrary, plaintiff persistently maintained, as found by the trial court, that the machine was not mechanically defective, and contended that it was correctly designed, built, inspected, and tested out before shipping, with the same care as like machines which had proved satisfactory elsewhere, and, if installed according to the blueprints furnished for that purpose, it would operate efficiently in the work for which it was intended; and that by retaining the machine beyond the 30 days allowed to examine and test it out defendant had accepted it under the terms of their contract.

The well-settled rule, supported by abundant authority in this State and elsewhere, that notice of dissatisfaction or defects will not relieve a purchaser from returning the property within the contracted time, is thus stated in .35 Cyc. p. 437:

“The contract of warranty may, however, provide that, if the article fails to fulfill the warranty, it shall be returned to the seller, and in such case the condition is part of the warranty, and must be complied with, and the fact that within the time stipulated notice of dissatisfaction is given will not relieve the buyer from the conditions of the contract. The condition may be that the article shall be deemed to fulfill the warranty unless returned within a specified time. Under such conditions, if the buyer retains the goods, he cannot avail himself of the breach, either in an action for damages or by way of recoupment or counterclaim.”

Unless the written contract entered into between the parties was subsequently abrogated or changed by an oral agreement, it is controlling, and, under the undisputed facts, defendant is precluded from making the defense to which this record is chiefly devoted by-reason of having retained and continued to use this machine after expiration of the 30 days given to test and accept or reject it.

In its findings of fact the court found that a subsequent oral agreement was made which opened the door for the defense allowed. It is urged that this finding is not sustained by any competent evidence, and the court’s conclusions on that proposition are erroneous both in fact and law. The finding is based upon the testimony of Mr. Cummer, defendant’s president, who was permitted, against plaintiff’s objection, to testify that he was in Cincinnati about the last of May, 1913, and while there was shown the machine by Mr. Egan, plaintiff’s president, it having been then built, but not completed ready for shipment. Of the interview he testified in part:

“I said, ‘Mr. Egan, the machine is too light to do the work that you say it will do’; and I said, ‘I am not satisfied with that machine under the contract.’ lie says, ‘You can take my word for it; there is no fear.’ ‘You need have no fear about this machine doing the work regardless of the contract,’ he said, ‘whether it is 30 or 60 days; it makes no difference. The Fay & Egan Company is behind that machine and will make it satisfactory.’
“Q. Did he tell you how long they would continue to make that machine satisfactory to you ?
“A. He said during the life of the machine. He said, ‘If anything goes wrong with the machine, and it does not work satisfactorily, if you will only let us know, we will make it right; we will make it work.’ He said, ‘We want to overcome your prejudices against the Fay & Egan Company; we want your business, and we are going to stand behind this machine.’ He says, ‘You need have no fear; keep the machine, and we will see to it that it does give you satisfaction and do the work intended for it.’ * * * And he said not to run it if it was not satisfactory, but to notify them.”

It is contended in the supplemental brief of plaintiff’s counsel that defendant’s notice under its plea was not sufficient to entitle it to this testimony, but, on the contrary, was misleading in the particular that it gave notice of reliance upon evidence of facts occurring “prior to and upon the execution of said contract,” as stated in said notice. Considering that portion of the notice standing by itself, there may be some force in this contention, but later in the same paragraph, referring to the 30-day provision, it is stated:

“If the same had any significance to plaintiff, it waived the same by its subsequent promises and covenants and doings herein enumerated.”

When the testimony of Cummer was offered, and shown to relate to a time subsequent to the written contract, it was not objected to because of insufficiency of notice, but “as.incompetent and immaterial for the reason that the argument [agreement] between these parties is shown by the contract”; and, upon counsel for defendant stating it was to show that a previous contract in regard to the '30 days was entirely waived by the conversation, as a further reason it was stated that a different contract subsequently made “would not be binding unless it rested upon a different consideration.” The testimony was admissible to support defendant’s claim of waiver, and it, was for the trial court to pass upon the credibility of the witness.

Although strongly controverted in many particulars, we think the material findings of the court touching the defense to plaintiff’s action has evidential support in the testimony introduced, and they therefore will not be disturbed by this court.

But as to defendant’s affirmative claim of recoupment, sufficient facts do not appear in the findings to sustain a judgment in its favor for the amount awarded. The only item of defendant’s damages definitely found and stated in amount which appears in the findings of facts is $233 for work, material, and new parts put in the machine on defendant’s initiative and “without notice to plaintiff.” In connection with this the court declined .to find that the machine had no value, and says:

“It is conceded that the work the machine will do is reasonably satisfactory work. The trouble lies in the want of capacity.”

Beyond some discussion of its capacity compared with the warranty of capacity, from which it is found to have “some value,” the court makes no definite finding of the actual value of the machine, and its conclusions of law end as follows:

“Having in mind, then, the present value of the machine as near as it can be determined from what testimony we have upon which to work, and also the elements of damages suffered by the defendant, I am satisfied that, after off-setting the amount still due and unpaid on the contract against the defendant company, the defendant is entitled to a judgment for the sum of $875 against the plaintiff.”

Defendant’s items of recoupment as stated in its special notice are:

“(a,) The difference in the actual value of the machine and as warranted, $1,310; (b) damages suffered by reason of delay in delivering the machine contracted for, $300; (c) cost of labor and expense incurred in attempting to set up and operate said machine, $100; (id) value of belts, machinery, and supplies ruined, $100; (e) cost of replacing defective parts and rebuilding said machine, $100; (/) loss accruing during the period of attempt to operate machine, resulting from want of capacity of machine, $600.”

The “period of attempting to operate the machine” appears to have been yet continuing at the time of the trial. Anticipated profits or possible losses from its operation are uncertain, speculative, and not a subject of recoupment.

It is manifest that some of the items sought to be recovered by defendant are not proper subjects of recoupment. Which “elements of damage suffered by defendant” went into the judgment is not disclosed. This was a piece of mill machinery, personal property. Defendant kept and continued to use it. The general rule as to measure of damages in such cases is the difference between the real and represented worth — the difference between the value of the machine furnished and the contract price of the one agreed to be delivered. Sinker, Davis & Co. v. Diggins, 76 Mich. 557 (43 N. W. 674); Hitchcock v. Hunt, 28 Conn. 343.

The judgment in favor of defendant for the sum awarded is not sustained by the findings, and is therefore reversed, with a new trial granted.

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


text:
    MURRAY v. KEELEY INSTITUTE OF WESTERN MICHIGAN.
    1. Accounting — Partnership—Corporations.
    Complainant and defendant B. about the same time became connected with defendant corporation as stockholders. The financial affairs of the company had become involved and some litigation was pending relative to the right to conduct the business. Defendant B., after having been adjudged a bankrupt, and become personally involved in extensive legal controversies, got complainant to join him as a partner in the business of operating defendant company and another like concern, in which he was then interested. Complainant was to have a half interest in the holdings of B., including half the stock held by the latter in defendant corporation. By a settlement with the owners of the original franchise in Michigan the parties became the holders of the exclusive rights in this State. They organized a corporation to conduct the business in Detroit but no institution was opened. They, also, acting in conjunction, secured other stock in the defendant concern and became the principal stockholders, B. holding a majority of the stock in his name. Por a time each had a salary, which was finally discontinued. In proceedings by one of the parties for an accounting proof was made tending to show juggling of accounts and withdrawal of money by B., who eventually used his majority control to secure complete management of the corporation. Held, that the venture was a joint enterprise in the nature of a partnership and that the complainant was entitled to an accounting of receipts and disbursements and to a credit for money charged by_ B. to complainant, • which he did not receive: also, that he was entitled to half the stock and assets of the two corporations owned by him and B. and to half of the profits shown.
    2. Same — Receiver—Partnership.
    But without any proof of insolvency or financial embarrassment of either corporation complainant could not have a receiver appointed to wind up the affairs of the companies.

      3. Same — Equity.
    Courts of equity will not, ordinarily, by virtue of tbeir general equitable jurisdiction, or by virtue of tbeir visitatorial powers over corporate bodies, sequestrate tbe effects of tbe corporation or take tbe management of its affairs from its officers and commit it to a receiver, whether upon tbe application of creditors or of shareholders.
    4. Same — Winding Up — Equity—Sequestration.
    Partnership property held in the name of one partner is held in trust for the partnership. Death of one of the partners dissolves the firm and as a general rule the survivor is entitled to possession to settle the affairs of the enterprise, but where the matter was complicated by the interposition of two corporations having a separate legal entity, the right to control the business could not be taken from the proper managing officials and board.
    Appeal from Kent; Brown, J.
    Submitted October 7, 1915.
    (Docket No. 22.)
    Decided March 30, 1916.
    Bill by Dennis Murray against the Keeley Institute of Western Michigan and others for an accounting and for other relief. From a decree for compláinant, defendants appeal.
    Affirmed, and case remanded for further proceedings.

      Charles A. Watt, for complainant.

      George E. Nichols, for defendants.
   Steere, J.

This litigation arose out of differences which developed between complainant and Charles M. Beckwith (deceased subsequent to the hearing herein) over their rights and interests in the two defendant corporations, which they together controlled and practically owned. Emma A. Beckwith is the widow of deceased, and Guy A. Beckwith is his brother. The pleadings, which cover 129 pages of the printed record, followed by sustaining and disputing evidence, oral and written, tell a long and tangled tale involving the history of the so-called “Keeley cure” operations in this State and the connection of the contesting parties with that business.

Complainant’s bill, filed on March 18, amended July 8, 1911, in the circuit court for Kent county, prays for a general accounting of all dealings between the various parties to this suit since the advent of complainant as a stockholder in defendant companies; that a receiver be appointed to carry on and wind up the affairs of said companies, and particularly for an accounting between complainant and the three Beckwith defendants; also that the latter be restrained by injunction from further managing or controlling the property, assets, or.the stock they own in said companies.

Defendants by their answer and cross-bill review and make general denial, or explain in detail from their standpoint complainant’s allegations and charges. The cross-bill as to Charles M. Beckwith joins in complainant’s prayer for an accounting between himself and the defendant corporations, “or any other person” connected with the business in which he was engaged; asks for an injunction to restrain complainant from selling, transferring, or incumbering any stock or stock rights in said corporations during the pendency of the suit, and that defendant Beckwith have a lien upon all stock or stock rights found standing either in the name of said complainant or himself as determined by this court in a former case.

Originally Detroit parties procured from the Keeley Institute of Dwight, 111., the right to sell and use its remedies and methods in the State of Michigan, paying $30,000 for the same. On December 31, 1891, they organized the Keeley Institute of Michigan, capital stock $50,000, located at Northville. In May following they changed their headquarters to Ypsilanti at the same time increasing their capital stock to $250,000. Three weeks subsequently they subdivided their territory into eastern and western branches, with headquarters respectively at Detroit and Benton Harbor, and a Keeley institute was run at the latter city for a time. After two years and various manipulations and transfers one Louis P. Pritchard appeared at Grand Rapids claiming to be the owner of the western branch,. under ah assignment of a previous owner named O’Dell, and on January 19, 1901, launched the “Keeley Institute of West Michigan,” with a nominal capital stock of $30,000, to be located at Grand Rapids. At this time defendant Charles M. Beckwith became interested in the project, and about seven months later complainant, Murray, purchased 8 shares of stock therein.

The only thing of value in the Keeley franchises consisted of a right to sell and administer the Leslie E. Keeley chloride of gold remedies for the treatment and cure of those afflicted with neurasthenia, or the liquor, tobacco, and drug addictions, for which treatments, as shown by the record, in the course of ten years 1,059 patients in the West Michigan institute paid in the neighborhood of $125,000. It is over division of these and other incidental receipts, as well as ownership and apportionment of the stock, that radical disagreements between the parties have arisen.

The initiation of this project at Grand Rapids under Pritchard’s guidance was not propitious. The assets consisted of the rights he acquired from O’Dell, and it is substantially conceded that the O’Dell contract was invalid. Pritchard, however, in various ways issued and disposed of $15,000 of stock having a face value of $25 per share. What he actually realized does not appear. In this distribution Beckwith received 60 shares, for which he testified that he paid $1,500, borrowed from a relative. Other shares were sold to different parties in the" usual manner of promotion, and gome seem to have been distributed as commissions or given to help make sales. An attorney named W. R. McGarry, who became active in the matter, received 154 shares, for which it is not contended he ever parted with any money. Pritchard was expected to remain and develop the business, and yet retained 120 shares when he unexpectedly and without notice to his associates left the State and enterprise which he had promised purchasers of stock he would build up and manage. He, however, returned later to Grand Rapids, and was arrested on complaint of Beckwith for defrauding him. An adjustment was reached in the matter, under which he surrendered any interest he might have in the business, leaving McGarry and Beckwith in control of a majority of the issued stock. About August 1, 1901, the institution was running under Beckwith as manager. McGarry participated in the capacity of secretary for a time, but later, as the result of some financial irregularity, turned over his stock to Beckwith and left the State. Beckwith had tried the cure on himself, as had his brother, Guy, successfully, as they testified, and complainant whose office was located across the street testified that he also became a patron of the treatment to his ultimate benefit, about which time he bought the 8 shares of stock for $100, becoming in that way and to that extent financially interested in and disposed to encourage the enterprise. After Beck-with had followed Pritchard to Canada and collected $750 from him the original promoter of the Keeley Institute of West Michigan ceased to figure in these matters.

Beckwith managed the Grand Rapids institute until the spring of 1902, when he left it in the hands of others and went to Detroit to operate a Keeley cure institute there for parties by the name of Waring, where he first learned as he testifies that the O’Dell contract, under which Pritchard had organized the Grand Rapids concern, was fraudulent and void, and that the Detroit institution which he was running was in a similar questionable position. He thereupon, at the suggestion of one of the owners of the original franchise for the State of Michigan, entered into a contract with those parties granting him all such right for the entire State for $2,000, payable in 40 monthly installments of $50 each. Shortly thereafter he became involved in litigation with the Warings, having refused to longer recognize them as having any right to run the Detroit institution or any other Keeley cure business in the State. In October, 1902, he abandoned the Detroit enterprise and returned to take charge of the Grand Rapids establishment, which had not prospered. That he was then financially embarrassed and practically without credit is plainly shown. He denies emphatically having then told complainant that he was. “at the end of his rope,” but whether he did or not the figure of speech was not inappropriate. He had just been discharged from bankruptcy when the West Michigan institute at Grand Rapids was organized. It had not been profitable up to that time. He had abandoned the Detroit concern, was involved in litigation in Detroit, had importuned various parties unsuccessfully for financial aid in his Keeley cure enterprises, and a man named J. W. Fales, who, under an alleged prior assignment from the original source, claimed paramount rights, was demanding of him $5 per patient royalties. While affairs were in this condition he solicited assistance from complainant, whom he induced to take an interest and become a partner with him in the business.

It is undisputed that at this time an agreement was reached between these parties under which they were closely associated together and co-operated in matters relating to the Keeley cure business until the differences arose which resulted in this suit. The two first and most important matters in difference here, relating to which much detailed evidence is introduced, both oral and documentary, are whether their agreement, which is conceded to have been for equal interests so far as it went, included the Grand Rapids Keeley Institute of West Michigan, and whether the money borrowed at that time was an indebtedness of and to be paid by the partnership or a personal liability to be borne by complainant. As to this the testimony of complainant and Beckwith is in direct conflict. To traverse and discuss all the incidents and transactions in evidence touching the relations of these parties, respectively urged and argued to refute or substantiate these conflicting claims, would be of no general benefit or interest. As to those issues, after a careful examination of the record, we do not disagree with the following facts found and conclusions reached by the trial court:

“At this time the business was practically a failure, the company at Grand Rapids was in debt, and C. M. Beckwith was unable to meet the expenses of the lawsuit in Detroit with the $50 per month payable on the contract and the royalties and other expenses due from the Grand Rapids institute, and it became necessary for him to get financial assistance. After vainly endeavoring in divers directions to obtain money or backing, he called upon complainant in February, 1903,. or shortly before that. He stated to complainant that he had learned the O’Dell contract was fraudulent and; • void; that he had a contract for the franchise for the entire State of Michigan; that he had a lawsuit on hand with the Warings at Detroit which would probably have to be fought out; that he would have to have another lawsuit with Fales over the ^validity of the O’Dell contract and his right to royalties from the Grand Rapids institute; that he was unable to continue the business on the contract and pay expenses and lawyers’ fees, and stated that, if complainant could assist him to borrow sufficient money to settle up these different matters and carry them through, the money so borrowed would be paid out of the proceeds of the business; that he, Dr. Murray, would not be required to invest any money in the business. All he would be required to do would be to get credit for the business, and that the complainant would have a one-half interest in all of his, C. M. Beckwith’s, holdings, including one-half of the Keeley Institute of West Michigan.
“The complainant looked into the matter, and concluded to go into the scheme and render the assistance required, and so proposed by Beckwith. Acting on this agreement, complainant raised $2,200 on two notes given by Beckwith and indorsed by himself, and further secured by an assignment in blank signed by Beckwith of the 334 shares of stock Beckwith then held and claimed to own. This stock was assigned to one Jennie Campbell. In addition’the complainant put in about $500 of his own money. The money so raised was used in settling for the contract (for the original franchise) with Radford, Fales, and McVittie in settling the lawsuit with the Warings over the eastern portion of the franchise so-called, paying attorneys and incidental expenses, and the complainant and C. M. Beckwith became the joint owners of the franchise for the whole State of Michigan and of the entire interest in the so-called Keeley Institute of West Michigan and partners in the entire enterprise.”

When the emergencies under which this partnership was initiated had been met and pressing matters adjusted, a suit was begun in the Kent county circuit court in chancery by complainant in behalf of himself and Beckwith to relieve the partnership of Fales’ demand for royalties which he was then pressing. The suit was prosecuted to a successful issue in this court (Murray v. Fales, 142 Mich. 605 [106 N. W. 282]); and is of interest in this connection.

Following this decision Murray and Beckwith organized a corporation, with a view to promoting a Keeley institute in Detroit, called the Keeley Institute of Michigan, with a capitalization of $50,000, $20,000 common and $30,000 preferred stock, the shares $10 each, and all their rights to royalties, etc., as adjudicated to them in the case of Murray v. Fales, supra, and the right to royalties under a contract of the Keeley Institute of West Michigan; the franchise and contract mentioned being appraised by them at $43,000, but “turned in at $30,000 in payment of common stock.” The amount of preferred stock actually paid was stated to be “the sum of no dollars.” No institute was opened by or under this corporation. The record indicates that 10 shares of its stock were credited to their attorney, and the rest divided between Beckwith and Murray. The bookkeeper of the Grand Rapids institute, who states that he went there once a month and worked up the month’s business, using as a basis a little blotter, kept in the office, of daily transactions of the business of the institute, testified that the “Keeley Institute of Michigan and the Beckwith and Murray accounts were merged,” that the items made on that occasion were all entered up under instructions of Beckwith, and that Murray had told him to do as Beckwith directed.

After their combination in 1903 complainant actively joined with Beckwith in pushing and developing the West Michigan institute, using his. social and other affiliations in procuring patrons, spending much time at the institution advising and assisting in the business, helping to adjust entanglements with the parent concern at Dwight, 111., and with other creditors, furnishing financial aid by loaning his credit, and working generally with Beckwith to make the enterprise successful. Together they took steps to negotiate for and gather in yet outstanding stock of the concern, and eventually secured practically all of it, some being taken in the name of Beckwith, but most of it in Murray’s, though of the whole capital stock Beckwith held a majority. From the beginning of their joint activities each was credited with a salary, Beckwith, who was supposed to devote his entire time to the business as manager, being credited as receiving' $2,000 per year, and Murray $1,500, until April 30, 1909, when by an agreement between them their salaries were no longer credited, and a resolution was passed at a meeting of the stockholders held Juné 4, 1909, that:

“No salaries will be allowed by the company or charged by the officers or paid to the president and secretary and treasurer for services rendered after May 1, 1909.”'

Even upon this subject of salary, the beginning and end of which is all a matter of record, the parties •are widely at variance. Beckwith testified that Murray’s salary account was a “fake,” the credits being made to him on the books because one Nellie Redlon, who owned 20 shares of stock, was demanding dividends as early as the stockholders’ meeting in ^January, 1903, and threatening litigation unless her stock was bought at par, and the trouble was such that it was agreed between him and Murray to also credit Murray with a salary, fixed at $1,500, Beckwith having right along been getting a salary of $2,000 which was credited to him; in other words, he testified that they were doctoring the books of the corporation for a fake financial showing to discourage Nellie Redlon and any other outside stockholder who might bother them. While Murray testified the entries were honest, in pursuance of an agreement as to their respective salaries made in 1903, when they became partners, and that when they agreed in 1909 to charge off or discontinue the salary credits it was because “they were not paid, and people were drumming us, and our credit was poor, and anything that was done in the institute I had to O. K. and indorse.”

Aside from Murray’s participation, the institute was apparently run as a family affair of the Beckwiths who lived out of and managed it. Guy Beckwith was 'employed and lived there with his wife, who was employed as housekeeper. Murray was friendly with, and manifestly had full confidence in, Beckwith, who, as manager in charge, handled the books and money. Murray at times received comparatively small quantities of money from the concern, but was led to believe that the expenses were such that there was little, if any, profit, that Beckwith was economizing and drawing as little money as possible for his own necessities, and that neither should think of drawing his full salary. Money of the company was used in purchasing outstanding stock and paid to keep up interest on the notes originally given and signed by both parties when Murray went into the venture, and charged on the books to the joint account of Beckwith and Murray. Two notes given at that time to Mrs. Robinson and Mrs. Campbell for money loaned on Murray’s solicitation and credit, amounting to over $2,000, were renewed every six months, and the interest regularly paid out of the funds of the institute for over seven years. These notes became one of the serious matters in dispute, after the differences had resulted in hostility, Beckwith claiming they were a personal debt of Murray’s.

We are impressed from a study of this record, as was the trial judge, that after Beckwith and Murray joined forces in 1903, although they maintained the corporate organization and kept up its records, as a convenience, for offensive and defensive purposes, and because there was yet outstanding stock, they in fact and effect ran the business as a private partnership, treating it and its assets as their own, with no consideration for or thought of the interests of the corporaation as such or its other stockholders, except as they might be annoyed by them, or to secure their stock and get rid of them as cheaply as possible. Although no serious break had occurred before April 30, 1909, Beckwith and Murray then got together and had a settlement of accounts, in which certain bills receivable and notes were divided, and, as Murray understood, each canceled what was due him from the company in order to put it out of debt; but Murray claims to have later discovered, and the trial court found, that $2,650 of money taken out of the business by Beckwith which did not show in the bank account was privately charged on the books by Beckwith, or, under his direction, one-half to each of them. While under the conflicting testimony and manner in which the books were kept by Beckwith, or under his direction, it is difficult to determine with satisfactory certainty just exactly the full situation, we are convinced that the trial court is substantially correct in the conclusion that up to April 30, 1909, Beckwith drew practically his $2,000 per year salary, and Murray received during that time about $1,700.

In January, 1910, Beckwith became seriously ill, and was unable to get around or attend to business until July, 1910, when he again resumed active management of affairs. During a portion of the interim his brother Guy managed the business. He was called away in March to look after a contract with which he was connected, after which Murray was in charge until Beck-with’s return. In the spring of 1910, when Beckwith was well enough to discuss business, Murray claims to have informed him they had finally secured all the outstanding stock and proposed that they “split up according to our agreement,” which he testified Beckwith had always recognized, but delayed dividing their stock until they secured the stock of Nellie Redlon, which was the last; that Beckwith then said, “All right; when Bill Eaton [the bookkeeper] comes over, we better speak to him”; that with Beckwith’s approval he secured the consent in writing of Mrs. Campbell, who held 354 shares standing in Beckwith’s name as security for the money they originally borrowed, and again spoke about the matter when it was again agreed that the bookkeeper should reissue the stock divided equally between them; that this was not done, and, when he later spoke to Beckwith about it, the latter denied that there was any such agreement. This was followed by a controversy and quarrel between the parties which resulted in Beckwith and his family, holding a majority of the stock, electing themselves officers of the corporation with good salaries and turning Murray adrift.

The hearing of this case was long and exhaustive. It was commenced April 25, 1912, and taking testimony then begun. When the parties first rested is not disclosed. The case was finally disposed of in circuit court January 29, 1914. The first findings were filed on June 19, 1913, and the original decree on August 2, 1913. In these findings and decree the court determined, amongst other things, that Murray was entitled to a half interest with Beckwith in the stock, assets, and profits of the two defendant corporations, passed upon various claims of the parties and entries made upon the books by Beckwith, which in certain particulars were declared erroneous and contrary to the facts, indicated the possibility of an adjustment between the parties, and left the matter of an accounting and appointment of a receiver open for a further hearing if required. Further testimony was taken October 11, 1913, followed by supplemental findings and decree on October 22d. A petition by Emma Beck-with as administratrix of Charles M. Beckwith, deceased, to open the decree was granted November 25, 1913, followed by further testimony and findings, and a final, supplemental decree filed January 29, 1914.

In the original decree of August 2, 1913, the court determined that Beckwith and Murray were equal partners in their Keeley cure enterprise, including- the Grand Rapids institution; that the money they borrowed through Murray’s efforts was a joint liability to be borne by the enterprise; that subsequent to their settlement of April 30, 1909, and particularly after Murray was excluded from knowledge or participation in the conduct of the business following their dissensions in 1910, the books of the concern had been manipulated in certain particulars to Murray’s disadvantage. After a further hearing upon the deferred questions of complainant’s application for an accounting and appointment of a receiver, the court in its findings stated that a receiver should be appointed for the two defendant corporations, but no order or decree was entered to that effect, because, as counsel state in their brief, a bond was filed and appeal taken. The supplementary decree of October 22, 1913, “amendatory of the findings and decree heretofore made herein so far as they conflict herewith,” determined and decreed that the estate of Beckwith, deceased subsequent to the first hearing, owed and should pay the Keeley Institute of West Michigan $5,157.38, and said institute should have a lien on his stock therefor; that the institute owed and should pay Murray $379.51, and that $404.91 owing from the Keeley Institute of West Michigan for royalties, and all royalties earned after October 31, 1913, should be equally divided between Murray and Beckwith’s estate.

The decree was thereafter opened by an order of the court “in the interest of justice and equity between the parties” to take further testimony “under an issue or issues to be framed between the parties hereto, and for a rehearing so far as the same may be proper,” upon a petition therefor by Mrs. Beckwith, claiming that she had advanced and loaned certain money to her husband for which she had a lien upon his stock in the Keeley Institute of West Michigan, and praying that the decree'previously rendered be modified to protect her rights. After hearing evidence upon the. issues then presented, further findings were made and a final supplemental decree rendered holding that Mrs. Beck-with had no lien upon her husband’s stock by assignment or conveyance, but that she had, in fact, loaned him certain money which he used in paying liabilities of said company, and in justice the estate should be credited with that sum and interest, amounting to $1,-706.97. The former decree was therefore

“amended by deducting that amount from the amount due from the estate of the said Charles M. Beckwith to the said Keeley Institute Company of West Michigan, and that there is due from the estate of said Charles M. Beckwith to the said Keeley Institute Company of West Michigan the sum of $3,450.41.”

We gather the main essentials of the court’s decision from its various findings and decrees as they appear in the record to be substantially as follows: Having determined the two leading questions as before stated, the court finally found upon an accounting and decree that the Beckwith estate owed and must pay the Keeley Institute of West Michigan $3,450.41, less $202.47, one-half of the $404.95 royalties found due from the institute and directed to be paid by it to the said estate and Murray in equal proportions, leaving the estate indebted to the institute $3,247.94, for which it is given a lien on Beckwith’s stock; that the estate owed and is directed to pay Murray $379.51 together with his half of the royalties found due ($202.47), making a total of $581.98. This, in effect, also gives Murray, though not directly payable to him, $1,623.97 from the Beckwith estate as his half of the amount which the estate is required to pay to the West Michigan institute, in which he was an equal partner with Beckwith.

To reach the above result the controlling questions to be determined were issues of fact raised by the irreconcilable testimony of the contending parties. The case was long drawn out, heard and reheard as different questions arose. The record makes clear that much pains and time were devoted by the court to reviewing the evidence in its various aspects and working out its findings. The testimony was taken in open court at intervals. The learned circuit judge before whom the case was tried saw and heard the witnesses as they testified before him under varying circumstances at different times as the case developed. It is true, as urged by counsel, that it becomes the duty of this court to hear the case de novo and pass upon the facts; yet it has been more than once said that the advantage which that court has in passing upon the credibility of witnesses as their testimony is listened to in open court is an element which may be taken into consideration by this court in reviewing the conflicting testimony of those witnesses as found in the printed record. A study of this ample record has led to the conclusion that the weight of convincing evidence fairly supports the result reached by the trial court upon the above propositions.

Upon the showing made in this record we do not think the court is justified in ordering dissolution of the defendant corporations, or appointing a receiver to take charge of their assets and wind up their affairs. Neither of them is shown to be insolvent or financially embarrassed.

The Keeley Institute of Michigan is practically dormant ; its only function thus far being to carry title to the Keeley franchise rights in Michigan and receive any royalties due under them.

As to the Keeley Institute of West Michigan, which is the real subject of contention, the testimony discloses that after the death of Charles Beckwith, on July 2, 1912, his brother Guy took charge of the business as manager, by approval of the parent Keeley Institute of Illinois (which has certain control over the appointment of managers in institutions operating under franchises from it), hi's salary being fixed at $250 per month by the board of directors, which was composed of members of the Beckwith family. It is shown, apparently without dispute, that under his. management during the pendency of this litigation the institute has prospered and progressed, paid all its expenses and debts, except as contingent upon this suit, and on May 1, 1915,. had profits on hand represented by real estate loans and cash amounting to over $2,000. No insolvency, mismanagement of the business, or dissipation of the assets of the corporation are shown. Circumstantially its condition tends to confirm complainant’s claim of a leak or diversion of funds when Charles Beckwith was manager. The fact that wrongful control and use of certain stock in the corporation equitably belonging to complainant, or in which he has a beneficial interest, excludes him from office or active participation in the management, does not in itself justify the appointment of a receiver or a dissolution of the corporation,'even though a case calling for some equitable relief is made out.

“Courts of equity will not ordinarily, by virtue of their general equitable jurisdiction, or by virtue of their visitatorial powers over corporate bodies, sequestrate the effects of the corporation or take the management of its affairs from its officers and commit it to a receiver, whether upon the application of creditors or of shareholders.” Town v. Car Co., 172 Mich. 519 (138 N.W. 338).

With the respective rights of the parties determined as and to the point above indicated, a decree directing only an equal division of the stock would not be full or adequate relief under the circumstances shown, nor, as we view it, ultimately in the interest of either party. Complainant’s bill asks specifically for a receiver -of the corporations, and also contains a prayer for general relief. It outlines an agreement by which Beck-with and Murray combined their capital, credit, skill, and labor together in a business enterprise for common and equal profit. The evidence supports the claim that they agreed to be and were partners and. equal owners in whatever Beckwith then had or controlled in the Keeley cure business or whatever they subsequently acquired, and a part of their project was to pick up the then practically worthless outstanding stock of the Grand Rapids institute, which they eventually did. They never divided up the assets acquired in this common enterprise for joint profit. Partnership property held in the name of one partner is held in trust for the partnership. The death of a partner dissolves the partnership, and, as a general rule, the surviving partner is entitled to possession of the partnership assets to adjust and settle up the affairs of the concern; a manifestly improper and impossible course here, with intervening corporations which they created and maintained, with separate legal entity, as artificial persons, under distinct official control until ended by appropriate legal proceedings. That which the partnership directly owned and controlled was stock in those corporations, by a majority of which officers authorized to control and manage the affairs of the corporations were selected.

Without direct interference with the control and business management of these defendant corporations, except to restrain them and their officers from disposing of, incumbering, or sequestering their assets, we think it proper under the circumstances of this case, and within the power of the court under complainant’s general prayer for relief, to wind up the affairs of the partnership as such by placing the stock of the two companies in the hands of a receiver, except 20 shares heretofore assigned to Mrs. Beckwith and 2 shares to Guy Beckwith in the West Michigan institute, and 10 shares to Guy Beckwith in the Keeley Institute of Michigan, which complainant is willing to concede, and that the receiver be authorized to sell said stock to the highest bidder as the court may direct; the proceeds to be equally divided between the Beckwith estate and complainant ; the stock of the Beckwith estate, however, to bé subject to the lien of the West Michigan Institute for the amount heretofore found due it from said estate.

The decree of the circuit court is accordingly affirmed, with costs to complainant, and the case remanded for further proceedings in harmony with this opinion.

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