text:
    BOSTON PIANO & MUSIC CO. v. PONTIAC CLOTHING CO.
    1. Appeal and Error — Scope of Review — Defenses not Raised on Trial.
    The fact that a contract involved in an action is invalid on one ground cannot affect the Supreme Court’s decision on writ of error where such ground was in no way made a matter of defense in the trial court.
    2. Same — Court Rules — Plea of General Issue — Notice.
    Circuit Court Rule No. 23, §§ 2, 3, fixes the matters of affirmative defense which do not appear from the declaration, which are not available under a plea of the general issue, and which must be set up in the notice, in order to mate them available as a defense upon the trial.
    3. Same — Jurisdiction—Scope of Review.
    The Supreme Court, on writ of error, exercises appellate jurisdiction and must dispose'of the case on the record as made.
    4. Contracts — Principal and Agent — Authority of Agent — Question for Jury.
    Where a corporation was a family affair and the daughter of the president and general manager was employed by it and did considerable of the office work, the question of her authority to sign the order or contract involved in the action was one for the jury.
    5. Fraud — Liabiiity of Person Charged — Rum.
    The rule that one charged with fraud cannot escape liability because the party with whom he is dealing has confidence in him, relies upon him, and by reason of such confidence is not more vigilant, applies where a contract is signed without reading it.
    6. Same.
    One charged with fraud cannot escape liability because the party with whom he is dealing has confidence in him, relies upon him, and by reason of such confidence is not more vigilant.

    7. Contracts — Varying Terms of Written Contract — Evidence.
    Negotiations preliminary to the execution of a written instrument may not be received to change or vary its terms.

    8. Same.
    Preliminary negotiations are merged in a written contract.
    9. Fraud — Promises—Misrepresentation.
    A promise of something to be done in the future is not a misrepresentation of an existing fact.
    10. Same.
    Calling a promise a misrepresentation does not make it such.
    11. Contracts — Evidence.
    When parties put their contract in writing, the writing is the evidence of what such contract is.
    12. Fraud — Contracts—Promises—Bona Fides.
    In an action on a contract, in which the defense of fraud is interposed, it will be error to admit defendant’s evidence of promises made to induce the contract when there is no claim that such promises were made in bad faith, with no intent to perform them and as part of a scheme to defraud, and it appears that the contract was dis-affirmed before the time for the fulfillment of the promise arrived.
    13. Same — Contracts — Evidence — Varying Terms of Written Contract — Misrepresentation.
    Regardless of the rule that evidence of negotiations preliminary to the execution of a written contract may not be received to change or vary its terms, if misrepresentations of material facts are made to" induce the contract, and do induce it, evidence of such misrepresentations may be given for the purpose of establishing fraud. ■
    14. Same — Promises—Contracts.
    Statements promissory in their character that one will do a particular' thing in the future are not misrepresentations, but are contractual in their nature, and do not constitute fraud.
    ■ 15. Same — Pleadings—Amendments.
    On writ of error by the plaintiff in an action on a contract, held, that the questions of fraud involved were not such as went only to formalities in pleading which might be saved in the Supreme Court by the statute of amendments, but that they went to the very heart of the case.
    Error to Oakland; Smith, J.
    Submitted October 9, 1917.
    (Docket No. 63.)
    Decided December 27, 1917.
    Assumpsit by the Boston Piano & Music Company against the Pontiac Clothing Company on a promissory note. Judgment for defendant. Plaintiff brings error.
    Reversed.

      Alfred Holzman and Peter B. Bromley, for appellant.

      Andrew L. Moore, for appellee.

      Generally on the question of right to rely on representations made to effect contract as a basis of a charge of fraud, see note in 37 L. R. A. 593.

      On the general rule that parol evidence is not admissible to vary, add to, or alter a written instrument, see note in 17 L. R. A. 270.

   Fellows, J.

The contract sued upon in this case is like that in Boston Piano & Music Co. v. Seckinger, 198 Mich. 312 (164 N. W. 263), and similar to the ones in Loveland v. Bump, 198 Mich. 564 (165 N. W. 855), and Harrison v. Grier, 198 Mich. 672 (165 N. W. 854), handed down herewith. The defenses made in the three cases referred to that the transaction was illegal, in contravention of public policy, and void were not made in this case. This defendant in the court below insisted in his defense that the contract was not executed by any one authorized to execute it, and that it was procured by fraud. After the case was submitted here we desired the views of counsel, and invited briefs on the question of whether it was within the province of this court to dispose of this case upon the question's deemed decisive in those cases; the questions not having been raised in this case in any way. Briefs on this question have been filed, and we have not only considered them carefully, but have again scanned the record with care to find any intimation in it that these questions were suggested to the trial court, or any requests that might be deemed to raise them. We find no intimation of such defenses, nor any discussion of them in the brief filed in this court; nor is there any claim made that the contract upon its face shows any invalidity. We are constrained to the view that we cannot sm sponte dispose of this case upon a question not in any way brought to the attention of the trial court, and not in any way made an issue there, without doing violence to the established rules of procedure. This we are not inclined to do. Counsel calls our attention to the original notice filed with defendant’s plea, but this notice was stricken from the files, and properly so, as being too indefinite. Defendant was given leave to file an amended notice. This the defendant availed itself of, and elaborately set up the facts, which it insisted constituted the fraud, but gave no intimation that it would insist that the contract declared upon and a copy of which was attached to plaintiff’s declaration was void or avoidable, or illegal as contrary to public policy.

Whatever may have been the former rule as to defenses which were available under the general issue, the present court rules have fixed the matters of affirmative defense which do not appear from the declaration, which are not available under a plea of the general issue, and which must be set up in the notice, in order to make them available as a defense upon the trial. Circuit Court Rule No. 23, §§ 2 and 3. This court is exercising appellate jurisdiction, and must dispose of cases submitted to it upon the record as made.

The plaintiff attached to its declaration a copy of the contract. There was no denial of its execution under Oath; but defendant was permitted, without objection on this ground, to give testimony tending to show that it was not signed by one authorized to execute it. It appears to have been signed by Frances Barnett, a daughter of Joseph Barnett, who was general manager and president of defendant company. The corporation was a family affair, and the daughter was an employee in the store, and did considerable of the office work. Without going into detail, we think there was sufficient in the case to make the question of her authority to sign the order, or contract, a question for the jury.

The other questions revolve around the question of fraud. The fraud is claimed to consist of: (a) Statements made by the agent of plaintiff pending the negotiations: (1) that there would be nothing to pay until the end of the year; (2) not then, unless defendant’s business increased from 25 to 50 per cent.; (3) that plaintiff would conduct the advertising campaign through its representatives; (4) that there would be no notes or contracts to sign; (5) that plaintiff would send one or more men to assume the management of the campaign. (b) In representing to Miss Barnett that the paper she signed was not a contract, but was only a statement of her selection of the make of a piano.

Taking these defenses in their inverse order, it was the claim of defendant that Miss Barnett was induced to sign the contract on the representation of plaintiff’s agent that it was only a paper showing the make of piano selected, and that she signed it in reliance upon such statement, without reading it. Such representation, if made, was a representation of a material fact, and, if the paper was signed in reliance thereon, amounted to fraud, and the fact that Miss Barnett could have informed herself of the contents of the paper by reading it is no defense. One charged with fraud cannot escape liability because the party with whom he is dealing has confidence in him, relies upon him, and by reason of such confidence is not more vigilant. John Schweyer & Co. v. Mellon, 196 Mich. 590 (162 N. W. 1006), and authorities there cited.

The rule is elementary that negotiations preliminary to the execution of a written instrument may not be received to change or vary its terms. Such negotiations are merged in the written contract. When parties put their engagements in writing, such writing is the evidence of what their engagements are. If misrepresentations of material facts are made to induce the contract, and do induce it, evidence of such misrepresentations may be given for the purpose of establishing fraud. But a promise of something do be done in the future is not a misrepresentation of an existing fact. Calling a promise a misrepresentation does not make it so. The so-called misrepresentations found under group (a) are promissory in their character, and are not statements of existing material facts, nor is there any claim in the pleadings that they were not made in good faith, or with no intention to Carry them out, or a part of a fraudulent scheme, nor was the case submitted upon any such theory. When evidence was offered of them in the court below, it was objected that they tended to vary and change a written instrument, and that they did not constitute fraud. This objection was overruled, the evidence was received and submitted to the jury as a basis of defense. In this there was error. As stated, there was no claim that these promises were made in bad faith, with no intent to perform them and as a part of a scheme to defraud so as to bring the case within McDonald, v. Smith, 139 Mich. 211 (102 N. W. 668), and kindred cases. Here we have naked promises as a basis of fraud; not even unfulfilled promises, because defendant disaffirmed the contract before any campaign was started. Statements promissory in their character that one will do a particular thing in the future are not misrepresentations, but are contractual in their nature, and do not constitute fraud. Hubbard v. Long, 105 Mich. 442 (63 N. W. 644); Macklem v. Fales, 130 Mich. 66 (89 N. W. 581); Long v. Woodman, 58 Me. 49, 54; Cunyus v. Guenther, 96 Ala. 564 (11 South. 649); Dawe v. Morris, 149 Mass. 188 (21 N. E. 313, 4 L. R. A. 158, 14 Am. St. Rep. 404); McComb v. Lumber Co., 184 Mass. 276 (68 N. E. 222); State Bank of Iowa Falls v. Brown, 142 Iowa, 190 (119 N. W. 81, 134 Am. St. Rep. 412, and note, 10 L. R. A. [N. S.] 640); Birmingham Warehouse & Elevator Co. v. Elyton Land Co., 93 Ala. 549 (9 South. 235). 12 R. C. L. p. 254, lays down the rule in the following language:

“Since a fraud must relate to facts then existing or which have previously existed, the general rule is that fraud cannot be predicated upon statements promissory in their nature and relating to future actions, nor upon the mere failure to perform a promise, or an agreement to do something at a future time, or to make good subsequent conditions which have been assured. Nor, it is held, is such nonperformance alone even evidence of fraud. Reasons given for this rule are that a mere promise to perform an act in the future'is not, in a legal sense, a representation, and a failure to perform it does not change its character. Moreover, a representation that something will be done in the future, or a promise to do it, from its nature cannot be true or false at the time when it is made. The failure to make it good is merely a breach of contract, which must be enforced by an action on the contract, if at all.”

The questions of fraud here involved are not such as go only to formalities in pleadings which might be saved in this court by the statute of amendments, these questions go to the very heart of the case.

For the errors pointed out, we are constrained to reverse the case. A new trial will be granted. Plaintiff will recover costs of this court.

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


source: Caselaw Access Project

author: Fellows, J.

license: Public Domain

text:
    CARLETON v. FOUNDRY & MACHINE PRODUCTS CO.
    1. Master and Servant — Workmen’s Compensation Act — “Employees” — Independent Contractor.
    One is not an employee within the workmen’s compensation act, but an independent contractor, where he is engaged in the business of moving heavy machinery and hires, pays and discharges workmen engaged in doing the work, is not required to give his personal services, has entire supervision of the work after the method of doing it has been determined, and receives compensation based upon the cost of material and labor and a specified per cent.

    2. Evidence — Judicial Notice.
    Judicial notice will be taken of the custom of letting contracts on the basis of cost plus percentage as a contract price for a completed job.

      Certiorari to Industrial Accident Board.
    Submitted October 19, 1917.
    (Docket No. 18.)
    Decided December 27, 1917.
    Elizabeth J. Carleton presented her claim for compensation against the Foundry & Machine Products Company for the accidental death of her husband in defendants’ employ. From an order awarding compensation, defendant and the Michigan Workmen’s Compensation Mutual Insurance Company, insurer, bring certiorari.
    Reversed.

      Beaumont, Smith & Hams, for appellant.

      Keena, Lightner, Oxtoby & Hanley, for appellee.

      On construction and effect of workmen’s compensation acts, generally, see comprehensive note in L. R. A. 1916A, 23. L. R. A. 1917A, 80.

   Fellows, J.

Counsel for plaintiff so clearly stated the issue in this case to the arbitrators that we quote it:

“The chief testimony as I understand it is as to whether Mr. Carleton was an employee or an independent contractor. He was doing this work on a time and percentage basis; that is, he hired the men. The usual procedure of doing the work was, when the Foundry & Machine Products Company wanted any work of this particular kind done, such as moving machinery or anything along that particular line, they would call Mr. Carleton up, and he would go over and they would go over the work to be done together, and map out some plan of doing it, and then after this was done Mr. Carleton brought men and put them to work, and they would do the work. When the work was all done he was paid on the basis of the amounts he had paid out to his helpers, plus 10 per cent. When he worked himself, as he did at times, his own time was put in at 50 to 55 cents an hour. This raises the question, of course, as to whether he was an independent contractor or an employee.”

The work in hand consisted in lowering some heavy machinery from the third to the first floor of defendant’s plant. Defendant’s plant was not provided with the necessary appliances to do such work, and whenever it had such work to do it let the job to decedent who was in that business. The method adopted was that if defendant had a job of this character to be done its plant manager would communicate with decedent who would come over to the plant and they would discuss the matter together, the manager informing decedent what the company wanted done, they going over the job under consideration; there were no plans or specifications prepared. The contract was not reduced to writing, but rested in parol; by its terms decedent was to furnish all tools and appliances, some of which he owned, and some of which he borrowed; he was to furnish all material, was to furnish all labor, either men in his regular employ, and at times he had as high as 20, or those employed by him for the special job. Carleton’s men did not punch the time clock of defendant, and their hours differed from those of defendant’s employees. They were paid by Carleton. Upon completion, or during its performance, if extended, he rendered a bill which included the cost of all material and labor, plus 10 per cent. There was no stated periods for rendering these bills during the progress of the work. They were rendered on regular statement forms, the heading of which was, “F. E. Carleton Construction Company, Teaming and Carpenters, 623 Fourth avenue, Telephone, Grand 2715.” If he performed any labor himself, his time was charged in the account at regular wage per hour. He was not required, however, by the terms of his contract to personally do any work, and frequently had several of the jobs running at the same time for different companies. The company had the right to change the plans; this is said to be of mutual benefit, permitting the work to be done as the company desired it, and decedent getting the percentage for the additional work the change entailed. The decedént received his fatal injury on Decoration Day at defendant’s plant. On this day none of defendant’s employees were at work, and decedent had informed defendant’s manager that he could get his whole gang together on that day and could also borrow tackle from the Russell Wheel & Foundry Company. There was testimony that defendant’s manager made suggestions with reference to the work, but there is no testimony that he did this as matter of right, or other than he would have done had the compensation for doing the job been fixed at a lump sum. The board evidently thought that defendant had the right to hire and discharge the employees selected by Carleton, as it states that at least on one occasion one of Carleton’s employees was discharged or sent away. There is an absence of evidence to support such conclusion. On one occasion one of Carleton’s men appeared at defendant’s plant looking, as the manager expresses it, “all in.” He inquired of the workman what the trouble was and was told that he had “been working all night over to the Detroit Foundry.” Under these circumstances he was not required to work that day. This act of humanity is not evidence of the right to hire and discharge, and we emphasize the word “right” because, as we shall presently see, it is not what control was exercised, but what right of control existed. . <

Three recent cases decided by this court under this act (Act No. 10, Extra Session 1912, 2 Comp. Laws 1915, § 5428 et seq.), are relied upon by the parties as being decisive of this case. The appellant relies upon the case of Perham v. Roofing Co., 193 Mich. 221 (159 N. W. 140), while appellee insists that the cases of Tuttle v. Lumber Co., 192 Mich. 385 (158 N. W. 875), and Opitz v. Hoertz, 194 Mich. 626 (161 N. W. 866), are more directly in point.

In Perham v. Roofing Co., supra, Perham agreed with defendant to lay the roof on the Webber residence, at $1.75 per square. He arranged with another workman to work on the job with him, and they hired a helper. In the execution of the work he was injured. Mr. Justice Ostrander, speaking for the court, said:

“The facts import, not a contract to lay slate at a price per square, instead of by the day, but a contract to do a job of slate laying. * * * Perham was in the exercise of an independent and distinct employment, not under the immediate control, direction, or supervision of the American Roofing Company.”

And it was held that he was not entitled to compensation.

In the case of Tuttle v. Lumber Co., supra, Tuttle hauled logs for the defendant at $2 per thousand, and was injured while in that work. Mr. Justice Stone, who wrote the opinion in that case, very clearly laid down the rule as to the right to control to which we have adverted, and pointed out that where the question of control was involved it was a question of right, not a question of actual interference. He said:

“We are of the opinion that the test of the relationship is the right to control. It is not the fact of actual interference with the control, but the right to interfere, that makes the difference between an independent contractor and a servant or agent.”

So it is not a question of interference, or noninterference, not a question of whether there has been suggestions or even orders, as to the conduct of the work; but a question of the right to act, as distinguished from the act itself or the failure to act. There was evidence in that case showing such right to control. Tuttle could only perform his labor under the control of the company. It, through its other employees, loaded his sleigh with logs; this could only be done at a skid-way where a jammer was set by the company. He was equally controlled in the unloading, and in that case a very pertinent fact in determining this question existed — he had not the right of substitution. The contract was for his personal services; and herein lies one of the distinguishing features in the instant case. Here the contract did not require the personal services of Carleton. He might work or not as he saw fit. The defendant had no say on that subject, no right of control over him or his time, or his movements. He could go or come as he saw fit. He contracted to produce results through means and men chosen by him, and did not contract for his personal services.

The distinction in this regard between the Tuttle Case and this case is made apparent by the consideration of two cases under the British compensation acts. The case of Paterson v. Lockhart, 42 Scottish Law Reporter, 755, upon principle is somewhat like the Tuttle' Case and an award was allowed upon the theory that Paterson, a quarryman, was a workman within the sense of the act. The Paterson Case was urged upon the court in Chisholm v. Walker & Co., 2 B. W. C. C. 261, where the applicant owned a horse and engaged to drag logs of timber for respondent at 8s. a day. He was not required to give his personal services. Lord Justice Clerk said:

“On the facts stated here I cannot find anything to indicate that this man was a servant employed by a master and remunerated by wages, that is, at so much per day or per hour or per piece. The present case is a case in which a man who has a horse of his own goes to a firm of timber merchants; they say that they want logs removed from one place to another; he says, T have a horse, I shall bring it and work any day you wish me to do so, and for that you will pay 8s. a day.’ There is nothing there of the nature of wages. It would have been the same thing if he had brought twenty horses to do the work instead of one. The contract was that he should get the work done. It was not a contract that he should do the work personally, but that he should do it in the only way in which it could be done by having somebody to lead the horse. That is not a contract of service. The case of Paterson was quite different. There the man claiming compensation was bound to do the work himself at so much a day.”

This was concurred in by Lord Low and Lord Ardwall and compensation was refused.

The case of Vamplew v. Parkgate Iron & Steel Co., 5 W. C. C. 114, is somewhat in point here. Deceased in that case agreed to break steel and clear cinders at so much per ton. He employed several men to assist him. The county court judge found he was an independent contractor and this was affirmed, Collins, M. R., saying:

“But the cardinal factor which underlies the whole of this legislation is that the act deals with the relation of employer and. employed. The very word ‘employment’ shows that that relationship must exist to bring a case within the act.”

In the Tuttle Case the company had contracted for the time and the services of a particular person, and the contract could not be performed, as matter of right, except by the performance of such services by the particular person employed. The master has the right to select his servants; he may hire and discharge them. He is the master who has the choice, control, and direction of the servants, and control does not exist unless the hirer has the right to discharge them and employ others in their places. Pioneer Fireproof Construction Co. v. Hansen, 176 Ill. 100 (52 N. E. 17).

In the case of Opitz v. Hoertz, supra, the controversy arose between defendants as to who was liable for the compensation. The work was being done on the premises of Brown & Sehler Company.. That company had contracted in writing with Hoertz & Son for supervision of the work. But

“this left the reserved power in Brown & Sehler Company to determine when the work should begin, how rapidly it should progress, and to stop the work at any stage if it chose to do so. It was left with Brown & Sehler Company to determine what buildings should be erected, whether they should be large or small, how much they should cost, of what material they should be constructed, and, when once decided, to purchase the materials therefor. It was left to Brown & Sehler Company to employ the men and teams if it chose, and to agree with the men on a price to be paid for their labor and to pay them,”

and it was held that under these facts Hoertz & Son were not independent contractors. The power reserved in Brown & Sehler Company was the power of an employer, not the power of a contractee dealing with a contractor. The power there reserved, the right of control there present, is absent in the instant case, and that case is clearly distinguishable from this one in its material facts.

That the courts recognize the distinction between the right to control employees, and the means and methods to be observed in the conduct of the work, as distinguished from the making of suggestions with reference to the work, is evidenced by the case of Curtis v. Plumptre, 6 B. W. C. C. 87. Curtis was injured while cutting down trees, which he was doing under an arrangement which partook of the nature of an independent contract. The effect of the arrangement was sought to be obviated by proof that the farm bailiff had exercised control, having told the men which way to make the tree fall. Cozens-Hardy, M. R., in the course of his opinion, remarking:

“A man often does employ an independent contractor with a gang, and he comes down and sees the man doing something injurious, and he says, ‘Don’t do it this way. Do it some other way.’ That is not control. It is a piece of advice by the landowner to a man employed by a subcontractor.”

In the case of Smith v. Simmons, 103 Pa. 32 (49 Am. Rep. 113), plaintiff in error and defendant in the court below had contracted with one Florence to dig a ditch. Mrs. Simmons recovered a judgment growing out of an injury occasioned by the negligence of Florence. The question presented was whether Florence was an independent contractor. The judgment was reversed, the court saying:

“Florence undertook the whole job for the compensation of $25, and the defendant had nothing to do except furnish the pipe and the box in which it was to be inclosed. With Florence, in the execution of this contract, he could no more interfere than he could about a job in which he had no interest. He might advise, but the contractor could receive or réject that advice as he saw fit; he might put a fence around the ditch whilst in process of construction, and Florence might treat it as an obstruction and remove it. In other words, Dr. Smith could not control the execution of the contract. He was entitled to a finished job, but it was not his business to see to, or regulate, the manner of its doing.”

Nor is inspection, or such supervision as may be necessary to secure the ultimate result, sufficient to change the character of the contract, or the status of the parties. Casement v. Brown, 148 U. S. 615 (13 Sup. Ct. 672). In this case it was said by Mr. Justice Brewer, speaking for the court:

“Obviously, the defendants were independent contractors. The plans and specifications were prepared and settled by the railroad companies; the- size, form and place of the piers were determined by them, and the defendants contracted to build piers of the prescribed form and size and at the places fixed. They selected their own servants and employees. Their contract was to produce a specified result. They were to furnish all the material and do all the work, and by the use of that material and the means of that work were to produce the completed structures. The will of the companies was represented only in the result of the work, and not in the means by which it was accomplished. This gave to the defendants the status of independent contractors, and that status was not affected by the fact that, instead of waiting until the close of the work for acceptance by the engineers of the companies, the contract provided for their daily supervision and approval of both material and work. The contract was not to do such work as the engineers should direct, but to furnish suitable material and construct certain specified and described piers, subject to the daily approval of the companies’ engineers. This constant right of supervision, and this continuing duty of satisfying the judgment of the engineers, do not alter the fact that it was a contract to do a particular work, and in accordance with plans and specifications already prepared. They did not agree to enter generally into the service of the companies, and do whatsoever their employers called upon them to do, but they contracted for only a specific work. The functions of the engineers were to see that they complied with this contract — ‘only this, and nothing more.’ They were to see that the thing produced and the result obtained were such as the contract provided for.”

In the case of Foster v. City of Chicago, 96 Ill. App. 4, it was sought to escape the question of independent contractor by insisting that the city had such a supervisory control, through the superintendence of the commissioner of public works, as to create the status of master and servant. This suggestion the court declined to follow, saying:

“The difference between an independent contractor and a mere servant is not determined solely by the retention of a certain kind or degree of supervision by the employer. It is to be determined by the contract as a whole, by its spirit and essence, and not by the phraseology of a single sentence or paragraph.”

The opinion of the appellate court in this case was adopted by the court of last resort in Foster v. City of Chicago, 197 Ill. 264 (64 N. E. 322). Without further quotation from the authorities, we cite the following cases as dealing with this question: Uppington v. City of New York, 165 N. Y. 222 (59 N. E. 91, 53 L. R. A. 550); Frassi v. McDonald, 122 Cal. 400 (55 Pac. 139, 772); Hughes v. Railway Co., 39 Ohio St. 461; Humpton v. Unterkircher & Sons, 97 Iowa, 509 (66 N. W. 776); Powell v. Construction Co., 88 Tenn. 692 (13 S. W. 691, 17 Am. St. Rep. 925); Harding v. City of Boston, 163 Mass. 14 (39 N. E. 411); Rogers v. Railroad Co., 31 S. C. 378 (9 S. E. 1059); Ridgeway v. Downing Co., 109 Ga. 591 (34 S. E. 1028); St. Louis, etc., R. Co. v. Willis, 38 Kan. 330 (16 Pac. 728); Corbin v. American Mills, 27 Conn. 274 (71 Am. Dec. 63); Gall v. Detroit Journal Co., 191 Mich. 405 (158 N. W. 36), and authorities there cited.

We have cited but a fragmentary part of the cases. There is much of case law on the subject, and text-writers have given it no. little attention. There is not the conflict found on many subjects. We have indicated the quite universal trend of decision. Each of the three cases from this court relied upon by counsel in the instant case are in accord with it.

Having in mind now the distinction between an independent contractor and an employee, let us again briefly refer to the undisputed facts.

Carleton was. in the exercise of a distinct and independent employment. The contract between defendant and Carleton was for the doing of a job in the line of his (Carleton’s) business; the job of lowering heavy machinery from the third to the first floor; the contract did not require the personal services of Carleton, it could be performed by substitutes chosen by him; it did not give to defendant the right to control either as to means or men in carrying it out, Carleton and Carleton alone hired, paid, and discharged the workmen. After deceased had been informed by defendant’s manager what job defendant wanted done, and they had gone over it, its execution was. turned over to deceased, and he furnished the tools and men, and was independent in methods and means. He, in following an independent business, undertook to do a specific job of work in his own way, with his own men, and his own appliances, without submitting himself to control as to petty detail as would an employee; any suggestion that came from defendant was advisory only, without the absolute right of interference; any supervision had to do only with- ultimate results.

Under the admitted facts, on the undisputed testimony, deceased was not an employee within the meaning of the act. We may take judicial notice that the arrangement of paying cost, plus a percentage as a contract price for a completed job, is growing in favor, and is becoming a common plan adopted by contractors in place of a lump sum payment. The Federal government has let contracts involving the expenditure of enormous sums of money on this plan. The change is only in the method of computing payment. There is no change in the relation of the parties from that which exists where the payment is a lump sum. The manner of computing payment for the completed job is not controlling; a change in this regard does not convert an independent contractor into an employee, either at common law or within the meaning of the act.

The. award of the industrial accident board is reversed.

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


text:
    McDONALD v. ANDREWS.
    1. Landlord and Tenant — Leases—Breach op Covenant — Forfeiture.
    A forfeiture of a lease is not worked where it contains a covenant against assignment without the written consent of the lessor and is assigned without his consent by the lessee to another, recorded, and then a quitclaim deed given back without any change in possession, and for the sole purpose of making record title of the lessee’s rights, the lease not having been, executed with the proper formalities to permit its recording.

    2. Equity — Contracts—Forfeitures.
    In equity interpretations of contracts which work a forfeiture are not favored.
    Appeal from Wayne; Sullivan, J., presiding.
    Submitted October 24, 1917.
    (Docket No. 127.)
    Decided December 27, 1917.
    Bill by Ray H. McDonald against Charles B. Andrews and another for the specific performance of a land contract. From a decree for plaintiff, defendants .appeal.
    Affirmed.

      C. K. Latham and Max Hulett (Harrison Geer, of counsel), for plaintiff.

      John D. Harger, for defendants.

      As to what amounts to a violation of a covenant in lease against assignment or sale, see note in 14 L. R. A. (N. S.) 1200.

   Fellows, J.

Plaintiff leased of defendants for five years, with an option to purchase, 20 acres of land located near Detroit. He was a truck gardener, owned lands adjoining, and leased the premises for the purposes of his business. The rent was $150 per year. He paid $50 of the first year’s rent down, and the balance by check before it was due. Nearly two weeks before the second year’s rent was due he mailed defendants his check for it. This check was retained by the defendants until after the tender hereinafter referred to, when it was returned, but not on the grounds that it was not certified, or not a proper tender or payment of the rent. The option to purchase is in the following language:

“Also the said parties of the first part give to the said party of the second part an option to buy the said lands at five hundred ($500) dollars per acre, any time before November 1, 1917, provided all rentals have been duly paid.”

On November 1, 1916, plaintiff tendered defendants $10,000 in cash, and requested conveyance of the premises, having theretofore informed them of Ms intention to exercise the option to purchase. Defendants refused the tender, and two daysolater this bill for specific performance was filed. On- November 11th defendants by mail returned the check for the second year’s rent.

The option to purchase and the circumstances of the tender in the instant case are not unlike those found in Nowicki v. Kopelczak, 195 Mich. 678 (162 N. W. 266). We there enforced the option and held the tender good. That case is controlling on these questions, and we pass to the consideration of the remaining question.

The lease contains the following clause:

. “Said party of the second part further covenants that he will not assign nor transfer this lease or sublet said premises or any part thereof, without the written assent of said parties of the first part.”

The lease had not been recorded, and was not executed with such formalities as permitted it to be recorded. Desiring to have some record of the instrument to protect his rights, plaintiff, under the advice of counsel, executed and acknowledged an assignment of the lease and option to his sister, Theo McDonald, and recorded the same. The assignment was not delivered to Miss McDonald, and she knew nothing of it until she was later requested by plaintiff to execute a quitclaim- deed to him, which she did. There was no change of possession of the premises, and the two papers were executed for the sole purpose of making record evidence of plaintiff’s rights. Defendants insist that this transaction worked a forfeiture of the lease and option, and upon this ground they refused to execute the deed, and for this reason they returned the check.

The clause here quoted is not an uncommon one, and undoubtedly appears in the printed part of the lease. Its purpose is obvious. The landlord desires to select his own tenant; he desires to determine for himself who shall occupy his premises; having selected such tenant, he reserves to himself to determine who shall be substituted. This purpose, this object, was in no way frustrated by the transaction here involved, which had for its sole object, its sole purpose, the making of record evidence of plaintiff’s rights. The assignment and deed must be construed together. They were both for a nominal consideration, and served the only purpose desired. They had no other object, and, the assignment never having been delivered to Miss McDonald, she never had even constructive possession of the premises. There is no claim that she ever had actual possession. Having in mind the purpose of this and similar clauses in leases, it is clear that the clause in question did not contemplate a forfeiture of this lease for a transaction which on paper, and on paper alone, temporarily assigned, and then reassigned, the tenant’s interest without any change of possession. In Grovenburgh v. McKeough, 117 Mich. 555 (76 N. W. 77), the tenant in possession had by contract sublet a portion of the premises, but the sub-lessee had not been put in possession. It was held not to work a forfeiture of the lease. In Crouse v. Michell, 130 Mich. 347 (90 N. W. 32, 97 Am. St. Rep. 479), an assignment of a lease as security for a bona fide indebtedness was held not to work a forfeiture under a clause similar to the one here involved.

This is a .proceeding in a court of equity where interpretations which work a forfeiture are not favored. Hilsendegen v. Hartz Clothing Co., 165 Mich. 255 (130 N. W. 646). The clause in question serves a useful purpose in dealings between landlord and tenant. That purpose we have stated. We should not in a court of equity, under the circumstances of this case, extend it beyond that purpose to work a forfeiture of a contract fairly entered into by parties under no disability.

The trial court entered a decree for specific performance. We find no occasion to disturb it. It is affirmed, with costs, to plaintiff.

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


text:
    WEINBERG v. LADD.
    1. Fraud — Animals, Exchange of — Warranties — Evidence — Question for Jury.
    In an action for fraud in the exchange of horses, where it appeared that defendant represented that his horses were sound, that at the time of the trade one of the defendant’s horses was discharging at the nostril and one had a lump under its jaw, both symptoms of glanders, that shortly after the trade an application of the proper tests showed them to be afflicted with the disease, and there was evidence of veterinarians that the length of time in which the disease develops' varies from a short time to two years, it was a question for the jury whether the horses were afflicted with glanders at the time of the sale.

    2. Same.
    Where the seller of horses represents that they are sound, but they are afflicted with glanders, an incurable disease, an action of fraud lies in favor of the buyer, and it is unimportant whether the disease is in its incipient stage, or farther developed.
    3. Same — Warranties—Public Policy — Instructions.
    An instruction as to the duty of owners of horses threatened with glanders that such owners owed the duty, in the interest of public policy and protection of the public, as well as the parties, to state the conditions squarely, and that if the owner of a team of horses or one horse had good reason to believe that it was suffering from an incurable disease, and one that was dangerous to the public, he was not permitted to sell that team or horse and take his chances on any person being injured and upon the public being injured, was correct, as it but declared the public policy of the State under 2 Comp. Laws 1915, §§ 7311, 7312, and 3 Comp. Laws 1915, § 15536.
    4. Same.
    Any error in instructing the jury, in an action for fraud in the exchange of horses, that the owner of a team of horses owed the duty, in the interest of public policy and protection of the public, as well as of the parties, to state the conditions fairly and squarely, and that if such owner had good reason to believe that his horses were suffering from an incurable disease and one that was dangerous to the public he was not permitted to sell that team and take his chances on any person or the public being injured, is harmless where defendant admitted representing the horses to be sound, and the court would have been justified in taking such question from the jury.
    5. Same.
    If representations of fraud in the exchange of horses are made and relied upon by the other party to his injury and they are false, an action for fraud may be maintained, even though such representations were made in good faith.
    Error to Wayne; Mayne, J., presiding.
    Submitted October 8, 1917.
    (Docket No. 49.)
    Decided December 27, 1917.
    Case by Samuel Weinberg against Frank G. Ladd and another for fraud and deceit. Judgment for plaintiff. Defendants bring error.
    Affirmed.

      Rowland M. Connor, for appellants.

      Harry H. Wait, for appellee.

      On the question as to whether statements made without knowledge of their falsity will afford ground for an action for fraud, see notes in 7 L. R. A. (N. S.) 646, 18 L. R. A. (N. S.) 379.

   Fellows, J.

The parties to this case traded horses in June, 1913. Plaintiff brings this action for fraud and deceit growing out of the trade, and to support his claim produced testimony tending to show that he is a dealer in horses and had a considerable number on hand; that defendants came to him claiming to be partners and desirous of exchanging a light team for a larger one, their small team being unsuitable for their work of excavating; that they picked out a heavy team, and he went out to see their team; that it was a good-appearing team, but that he noticed a discharge from the nostril of one of the horses, and inquired the cause, and was informed that the horses had been out in the rain, that defendants had just got them from the country, and that the one horse had taken cold, as horses were liable to do under such circumstances. He was told that the horses were sound, and claims that, relying on such representation, he made the trade, giving his heavy team for defendants’ lighter one and $125 in cash. He gave testimony to the effect that a short time thereafter, through a party to whom he sold the light team, he became informed that the horses were afflicted with glanders, and that he took them back, and quarantined them by direction of the State live stock sanitary commission; that tests were made by veterinarians located in Detroit and veterinarians representing the commission, and it was established that they were afflicted with the disease of glanders, a communicable, incurable disease, difficult to detect and capable of being established only by certain tests known to veterinary surgeons; and that, after keeping them a time in quarantine at considerable expense to himself, they were killed by order of the live stock sanitary commission.

Plaintiff recovered a judgment of $850, and defendants sue out this writ of error. They insist that the court should have directed a verdict in their favor on the ground that there is no evidence that the horses were afflicted with the glanders at the time of the sale. An examination of the record clearly discloses that this was a question for the jury. The veterinarians called by plaintiff, and there were several of them, gave testimony tending to establish that the length of time in which the disease develops varies from a short time to two years. The testimony of one of the defendants called by plaintiff under the statute shows that at the time of the trade one of the horses was discharging at the nostril, and one of them had á lump under its jaw, both symptoms of the glanders. This testimony, coupled with the fact that shortly after the trade an application of the proper tests showed them to be afflicted with this disease, took this question to the jury.

The testimony of the plaintiff and defendant agreed that before the trade defendant represented the horses to be sound. If they had the glanders, they were not sound, and the court upon the admitted facts would have been justified in instructing the jury that, if the horses had the glanders, plaintiff was entitled to recover. The undisputed testimony is to the effect that glanders is an incurable disease. If so, it was unimportant whether'the disease was in its incipient stage or farther developed.

Error is assigned on a portion of the charge in which the court informed the jury as to the duty of owners of horses threatened with glanders, telling them, in effect, that such owner owed the duty, in the interest of public policy and protection of the public, as well as of the parties, to state the conditions fairly and squarely; “in other words, the owner of a team of horses, or one horse, that he has a good reason to believe is suffering from an incurable disease, and one that is dangerous to the public, cannot sell — is not permitted to sell — that team and take his chances on any person being injured, and upon the public being injured.” The court went no farther upon this subject than the declared public policy of the State found in sections 7311, 7312, 2 Comp. Laws 1915, and section 15546, 3 Comp. Laws 1915. But, as we have already stated, defendant admitted representing the horses to be sound, and the court would have been justified in taking that question from the jury. Under the circumstances he cannot complain of these instructions.

Nor is it a defense that defendant believed the rep-reservations to be true. If representations of material facts are made and are relied upon by the other party to his injury, and they are false, an action for fraud may be maintained, even though such representations were made in good faith. Aldrich v. Scribner, 154 Mich. 23 (117 N. W. 581, 18 L. R. A. [N. S.] 379); Power Specialty Co. v. Power Co., 190 Mich. 699 (157 N. W. 408).

We have examined the other assignments of error, and find them to be without merit.

The judgment is affirmed.

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


author: Kuhn, C. J.

text:
    HAUSER v. GOEBEL BREWING CO.
    1. Trial — Instructions—Evidence.
    It is error to give an instruction not based on evidence.
    2. Contracts — Actions—Assumpsit—Common Counts — Evidence —Directed .Verdict.
    In an action of assumpsit for money had and received, it being claimed that, of $1,500 admittedly turned over by plaintiff to defendant for the purchase of a saloon, defendant paid only $1,200 therefor, held, that a verdict might have been directed for defendant.
    3. Same.
    In an action of assumpsit for money had and received, it being claimed that, of $1,500 admittedly turned over by plaintiff to defendant for the purchase of a saloon, defendant paid only $1,200 therefor, held, that as the trial court might properly have directed a verdict for defendant, and, the jury found for the latter, any errors in the court’s charge were harmless.

      Error to Wayne; Mandell, J.
    Submitted October 19, 1917.
    (Docket No. 136.)
    Decided December 27, 1917.
    Assumpsit in justice’s court by Theodore Hauser against the Goebel Brewing Company for money had and received. There was judgment for defendant, and plaintiff appealed to the circuit court. Judgment for defendant. Plaintiff brings error.
    Affirmed.

      Willis G. Clarke, for appellant.

      Orla B. Taylor (Jackson B. Clark, of counsel), for appellee.
   Kuhn, C. J.

This is an action of assumpsit for 'money had and received, in which judgment was rendered in favor of defendant both by a justice of the peace and, later, in the circuit court on appeal.

Plaintiff bought a saloon in Detroit from or through the Goebel Brewing Company. Some months later, to meet the requirements of the liquor committee of the common council of Detroit, a bill of sale was furnished, the consideration therein set forth being $1,-200. It is admitted that plaintiff paid over $1,500 to the defendant to make the purchase. Plaintiff claims that defendant told him it would cost in the neighborhood of $1,200, possibly a little more. The saloon business purchased for plaintiff was that of Fred Cook, at 448 Michigan avenue, and the sale apparently consisted of little more than the license, for plaintiff obtained neither the stock of liquors nor the old location, but was found a- new location by defendant at the corner of Trombley and Woodland avenues. The validity of the transaction is not questioned in this suit. Mr. Cook testified that he sold out for $1,-200; that the defendant paid up some bills he owed and paid the balance of the $1,200 to him in cash.

Defendant’s bookkeeper testified positively that the price was fixed at $1,500 from the outset of the transaction, and that $1,200 was never mentioned; that the bill of sale was prepared by defendant’s attorney, who inserted $1,200 as the consideration without any instructions from defendant to do so. Defendant’s ledger account of the transaction showed that the $1,-500 was disbursed and applied as follows: In payment of sundry bills and debts owed by Cook, viz.:

Robinson & Aronbeim, for liquors... .$456 45
Small bills owed by Cook............ 69 21
Amount owed defendant by Cook for beer.............................. 317 00
Rent of No. 448 Micb. Ave., Dec. 1, 1912, to May 1, 1913, 5 mos. $65.... 325 00 $1,167 66
Amounts paid over to Cook..........$201 55
130 79 332 34
Total..................................... $1,500 00

The $325 rent was for the period from December 1, 1912, to May 1, 1913, after Cook .sold out, and for premises which plaintiff did not occupy — according to his testimony was not allowed to occupy because he was told the building was condemned — although he testified he would have located there if he had been allowed to do so. Plaintiff claims, the purchase having been made for $1,200, that the $300 excess which he paid over to defendant is money held by defendant for his use. The circuit judge submitted the issue to the jury as follows:

“Let us find out what the plaintiff claims. He claims that he had a bargain, that is, a contract with the defendant, and his theory is that he deposited $1,-500 with the defendant, and that the defendant with that deposit was to get him a saloon. He claims that the defendant did secure a license and a saloon or a stock of fixtures, but paid only $1,200 therefor, and therefore, the plaintiff says, that being so, I want back the difference between $1,200 and $1,500; I want $300 and interest. That is the theory. Let us find out first how the defendant answers that theory. The defendant says that is not true; this bill of sale was used as evidence before the common council committee, but some time after the transaction between the plaintiff and the defendant was completed, and the defendant says, we have paid out, that is always speaking of the plaintiff’s theory, in rent, an amount that, added to the bill of sale, $1,200, equals $1,500, so $1,500, according to the defendant’s theory, is entirely eaten up. That is what the defendant says in regard to the plaintiff’s theory. The defendant comes in here with an entirely different theory than the plaintiff. The defendant says, the plaintiff came to us and said: T want to buy a saloon, and I will pay $1,500 for it.’ And the defendant then got busy and secured a saloon for $1,500, and that is all there was to the transaction according to the defendant’s theory. The defendant adds this, that if you find that the plaintiff was right in what he supposed the bargain was, then we want not only the amount of $1,200 we paid out, but we want our compensation for services as agent in securing a license and in securing a bill of sale, and attorney’s fees, etc., which more than eats up the $1,500. These are the theories that are introduced by the parties here and they make up the issues of fact. I charge and instruct you that if you believe that the plaintiff is right with regard to the terms of the bargain that he had with the defendant by which the defendant was to secure a saloon for him with a license and a stock of fixtures and that all that was paid by the defendant on behalf of the plaintiff, acting as agent, was $1,200, then the plaintiff would be entitled to recover the difference between $1,200 and $1,500. If, however, you find the bargain was as the defendant claims it was, an out and out bargain to secure a license and stock of fixtures for $1,500, then the defendant is entitled to a verdict. If you find that the defendant is right with regard to his theory and that the defendant paid not only $1,200, but the rent in addition, and that made up $1,500, then the defendant would be entitled to a verdict.”

The first assignment of error alleges that the circuit judge erred in submitting to the jury the claim for services, and in charging with reference to the claim for compensation for services as agent in securing a license, and it is claimed that there is no testimony in the record to support the submission ©f this theory. We think that plaintiff is right in this contention, as we find nothing in the record to warrant the submission of this theory to the jury. The only testimony with relation thereto was the testimony of defendant’s bookkeeper, who said that for $1,500 the defendant would see that the plaintiff obtained a saloon, and that they would see that the proper transfer of the license was made by the liquor committee. No claim was made for any such services.

The other complaint by the appellant refers to that part of the charge in which the court said:

“If you find that the defendant is right with regard to his theory, and that the defendant paid not only $1,200, but the rent in addition, and that made up $1,500, then the defendant would be entitled to a verdict.”

We do not think that this was error, because if the defendant paid the rent as consideration for the transfer to the plaintiff, as he did the other bills of Cook, then it would be proper to charge this sum to the plaintiff. The testimony introduced by the defendant was to the effect that Cook owed the rent under the lease, and no evidence was introduced to contradict that fact. The claim of the plaintiff is that he gave the defendant $1,500 to buy a saloon, and that only $1,200 was expended. The defendant shows conclusively that the $1,500 was expended to make itself whole because of the payment of Cook’s obligations, from whom it obtained the license. It follows, therefore, that it has no moneys in its possession belonging to the plaintiff, and under plaintiff’s own theory of the case, the action must fail. The trial judge might properly have directed a verdict for the defendant, and as the jury found for the defendant, any errors in his charge cannot be said to have been prejudicial.

The judgment must be affirmed.

Stone, Ostrander, Bird, Moore, Steere, Brooke, and Fellows, JJ., concurred.


text:
    SEMER v. CLEARY.
    Evidence — Admissibility—Res Gestas — Conversations.
    In an action on a written agreement by directors of a corporation to repurchase stock' at the expiration of a certain period on the giving of 90-days’ notice orally or in writing, evidence of a person who accompanied plaintiff to the office of one of defendants immediately after signing the agreement, on the question of oral notice to such defendant of election to sell the stock to such, defendant at such time, that plaintiff told such defendant that he was not purchasing the stock, but that he was merely putting 3 per cent, money to work to earn 6 per cent., and that he did not intend to hold the stock, and he wanted such defendant to understand that it was expected that he would redeem it and pay the purchase price, and interest, at the expiration of the contract, was admissible as part of the res gestee.

    ■Error to Delta; Flannigan, J.
    Submitted October 8, 1917.
    (Docket No. 54.)
    Decided December 27, 1917.
    Assumpsit by John A. Semer against John J. Cleary and another for the price of certain corporate stock. Judgment for plaintiff. Defendants bring error.
    Affirmed.

      N. C. Spencer, for appellants.

      A. H. Ryall, for appellee.
   Kuhn, C. J.

The defendants were, on May 10,1913, directors of the Escanaba Hotel Company, which was at that time erecting a hotel building in the city of Escanaba, and were selling stock of this corporation for the purpose of financing the building operations. As an inducement to plaintiff to purchase 300 shares of preferred stock of this company at $10 per share, defendants agreed with him that at the expiration of 3 years from the time of the purchase they would, at the option of the plaintiff, purchase the stock from him at the price paid by him, together with 6 per cent, interest, provided the plaintiff should give the defendants 90 days’ notice of his election to sell to them, either personally or in writing, by mail addressed to them, or either of them, at the city of Escanaba, Mich. This agreement was reduced to writing and signed by the parties. It is the claim of the plaintiff that immediately upon signing this agreement, he went to the office of the defendant Cleary and notified him verbally that he elected to sell the stock to him, and would expect him to take it up at the end of 3 years. The defendant Cleary denies having had any conversation with him then or any other time with reference to the stock until after a written notice of date May 10, 1916, given to him by the plaintiff, which notice, although received in evidence, was held by the court to have been insufficient, and the jury was instructed to disregard it.

At the time of the giving of the alleged verbal notice it is the claim of the plaintiff that when he went to the defendant Cleary’s office, he was accompanied by his brother-in-law, S. W. Farnsworth, whose wife was interested in the outcome of the suit, in that the money-used for the purchase of the stock was money left by the plaintiff’s deceased father, and he, in making the investment, was acting as trustee for the heirs of his father’s estate. Mr. Farnsworth was called as a witness by the plaintiff, and upon the question of the alleged notice to Cleary was permitted, over the defendant’s objection, to give the following testimony:

“Q. State what was said by Mr. Semer or by you in Mr. Cleary’s presence.
“A. We went into Mr. Cleary’s office. There were no other persons present except Mr. Cleary, Mr. Semer, and myself. And Mr. Semer told Mr. Cleary in my presence that he was not purchasing the stock, but that he was merely—
“Mr. Spencer: I object to that as testimony tending to vary the terms of the contract.
“The Court: It is part of the res gestee of the conversation. Go on.
“A.- Mr. Semer informed Mr. Cleary that he was not purchasing that stock, in the sense that he was to own it, but simply putting some 3 per cent, money to work to earn 6 per cent., and that he did not intend to hold that stock; and he wanted Mr. Cleary to understand right then and there that he expected him to redeem the stock and pay the $3,000, with 6 per cent., at the expiration of the ■ contract. I don’t remember Mr. Cleary saying anything in particular, other than he seemed to agree to it. I haven’t seen any of the parties, except Mr. Semer, to talk to them about the matter since that time.”

The trial resulted in a verdict for the plaintiff of $3,660, upon which judgment was duly rendered. Error is assigned because of the admission of the testimony above set forth, and this constitutes the sole question raised in this case.

The record discloses that the one important issue in the case was whether plaintiff had notified the defendant of the plaintiff’s election to sell this stock to the defendant, and the testimony all seemed to be directed to that point. The charge of the court clearly stated that this was the sole issue, and removed from the consideration of the jury any further questions. The conversation with reference to the verbal notice was denied by the defendant Cleary, and it is the claim of plaintiff that the witness Farnsworth was produced simply to. corroborate the claim of notice, and that it was not offered for the purpose of varying any contract, or for any purpose other than that of proving notice.. We think that it was competent testimony as bearing on and in connection with the only question in issue. The trial court admitted the evidence as part of the res gestse, and we think properly so. For a full discussion of this subject, see 3 Wigmore on Evidence, §§ 1745, 1768, 1788, 1790, 1795, and 1796. The author, in section 1768, quotes from an English case, where it was said:

‘"The words are then received, not as evidence of the truth of what was declared, but because the speaking of the words is the fact, or part of the fact, to be investigated.”

We are satisfied that the admission of the evidence in question was not error,-and affirm the judgment.

Stone, Ostrander, Bird, Moore, Steere, Brooke, and Fellows, JJ., concurred.


text:
    VAN HORN v. VAN HORN.
    1. Divorce — Extreme Cruelty — Evidence—Sufficiency.
    On a bill by a wife for divorce evidence held, sufficient to show that defendant was guilty of cruel and inhuman treatment towards plaintiff.
    2. Same — Alimony.
    On a bill for divorce, where the evidence showed that the parties had divided the property between them upon separating, each receiving $1,900 and, upon becoming reconciled, they bought a house in their joint names on which defendant paid $900 and plaintiff $1,500, and plaintiff later sold the property and received a payment of $1,300 and did not pay back the $900 to defendant, and, into a new home worth $3,300 plaintiff put $1,200 and defendant . $900, $1,200 being borrowed on a mortgage, and plaintiff had possession of the furniture, a division of the property, allowing defendant the $900 he had put into the first property and giving to each party one-half the net proceeds of the second property, was proper.
    Appeal from Wayne; Sullivan, J., presiding.
    Submitted October 11, 1917.
    (Docket No. 95.)
    Decided December 27, 1917.
    Bill by Lillian Van Horn against Levi Van Horn for a divorce. From a decree for plaintiff, defendant appeals.
    Affirmed.

      James H. Pound, for plaintiff.

      Benjamin & Betzoldt, for defendant.
   Kuhn, C. J.

The plaintiff, Lillian Van Horn, filed her bill of complaint for divorce against her husband, Levi Van Horn, praying for a decree of divorce on the' ground of extreme cruelty. The case was tried on the 27th of June, 1916, but the decree was not, signed until the 18th of April, 1917. From a decree granting plaintiff a divorce and providing for a settlement of their property rights and support "of their minor children, both parties appeal. The plaintiff claims she is satisfied with the decree of divorce, but is dissatisfied with the division of the property and the right given the father to see the youngest child. The defendant claims that the plaintiff failed to make out a case which entitled her to a decree, and that the bill of complaint should be dismissed.-

The parties hereto were legally wedded on July 8, 1894, at the city of Lapeer. The plaintiff has been the mother of five children to the defendant, of whom three are now living — one married, and away from home with her husband, Beulah, about 16 years of age, and Ray, aged about 7. After living for 12 years on a farm in Lapeer county, they moved to Flint, where they lived 5 years, and then came to Detroit. It appears that while the parties were living in Flint they separated, and the plaintiff commenced divorce proceedings there. They then agreed upon a division of their property. Plaintiff received $1,500 in cash and the household furniture, which was valued at $400, and the defendant retained an equal amount — that is, $1,900. In August, 1911, the parties became reconciled and came to Detroit, where they decided to purchase a home, and finally located on Hillger avenue. The defendant paid a deposit of $900, and the plaintiff put into this property $1,500 of her money, and a mortgage of $1,700 was assumed. The title of this property was taken in the name of the plaintiff. About 2 years later the plaintiff sold this property on Hillger avenue and received a payment of $1,300, which she kept, and did not pay back the $900 to the defendant which he put into the Hillger avenue property. They subsequently purchased a lot on Lycaste avenue, the deed of which was taken in their joint names, and they proceeded to build a home thereon. Into the Lycaste avenue home the plaintiff put $1,200, and the defendant $900, and $1,200 was borrowed upon a mortgage. The house was built by the defendant, who was a carpenter by trade, and it took him nearly 3 months to build it, and the house and lot, without his labor, cost about $3,300. The trial court found that the defendant was entitled to the return of the $900 that he put into the Hillger avenue property, and to one-half of the net proceeds of the Lycaste avenue property, the title to which stood in their joint names. When the plaintiff left the defendant, she took with her all the furniture, which included all she had brought from Flint, and also such new pieces of furniture as had been bought since they came to Detroit, and used it to furnish her rooming house on Beecher avenue. *

The trial judge who heard the testimony made every effort to bring the parties together, and seemed to be impressed that, having lived together so many years, for the sake of their home and their children they should make every endeavor to readjust their differences. In this he was unsuccessful, however, and finally granted a decree, being of the opinion that, while the plaintiff’s proofs did not make out the strongest case, yet they did present a case which entitled her to a divorce.

The extreme cruelty alleged is the infliction of physical violence, striking her with the fist and kicking her, and the ordering of the plaintiff from her home in the daytime and also in the nighttime. It would be unprofitable and serve no purpose to attempt to review the testimony in this case and to set forth all the acts of cruelty relied upon by the plaintiff. It is sufficient, perhaps, to refer to certain instances which occurred, according to the plaintiff’s testimony, one a month before the separation, when, she testified, the defendant struck her with his fist across her body and across her breast,, and tore off her clothes, on which occasion she was about to take a trip out of town with some friends. The treatment that he accorded her got her into such a nervous condition that she was unable to go. She testified further that, on another occasion, he lost his temper and struck her and injured her so that he called in a physician.

While it is true that the marriage relation should not lightly be set aside, and that mere incompatibility of temper and ordinary misunderstandings and bickerings should not be held to be ground for divorce, nevertheless we are of the opinion that there was sufficient proof in this case to warrant the action of the trial judge in granting the decree. He further had the benefit of seeing the parties in court and hearing the testimony, and became convinced that it was impossible for these two parties, to continue to live together.

Neither are we inclined to disturb his findings with reference to alimony. We think that the division of the property made by him was equitable and fair, and made suitable provision for the plaintiff.

Complaint is also made to that part of the decree which gives the defendant the privilege of visiting with and seeing his son, ítay, at all reasonable times and places, and having him one day a week in his sole custody. The decree further provides that the defendant is to pay $4 per week to the plaintiff for the support and maintenance of the minor child, Ray, until the further order of the court. It is urged that this amount should be increased. A petition with reference to these matters, however, might more properly be addressed to the Wayne circuit court, which court, upon a proper showing being made, can amend the order and make suitable provision to meet the circumstances of the case, if they require it.

We are of the opinion that, upon this record, the decree of the court below should be affirmed in all respects. One-half of the cost of printing the record to be paid by the defendant. No other costs to either party.

Stone, Ostrander, Bird, Moore, Steere, Brooke, and Fellows, JJ., concurred.


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      In re SCULLY’S ESTATE. GALLOWAY v. SCULLY.
    1. Executors and Administrators — Parent and Child — Claim for Services — Formal Contract Not Necessary.
    It is unnecessary, in an action by a child' against the estate of a parent for personal services rendered decedent, to show that at a given time before the rendition of the services a formal contract was entered into, on the one part to work and on the other to pay, in order to authorize a recovery.
    2. Same — Parent and Child — Claim fob Services — Evidence-Presumptions.
    Where the facts and circumstances attending the performance of work by a child for its parent and in the acceptance are sufficient to rebut the presumption that the services were gratuitous and to authorize the inference that both parties acted upon the understanding that they were to be paid for, the parent is liable for such services.
    3. Husband and Wife — Claim for Services — Evidence — Sufficiency.
    In an action by a wife against .the estate of her father to recover for services rendered to her parent, evidence of the husband that he had no claim whatever to his wife’s services and made none was insufficient to show that at the time the services were rendered the husband had relinquished all right to the wife’s services.
    4. Same — Claim foe Services — Statutes—Retroactive Effect.
    Act No. 196, Pub. Acts 1911 (3 Comp. Laws 1915, § 11478), providing that every married woman shall be absolutely entitled to have, hold, own, retain and enjoy any and all earnings acquired as the result of her own personal efforts, and to sell or otherwise dispose of any and all such earnings, and to make contracts in relation thereto the same as if unmarried, is not retroactive.
    Error to Washtenaw; Kinne, J.
    Submitted October 15, 1917.
    (Docket No. 122.)
    Decided December 27, 1917.
    Mary Galloway presented a claim against the estate of Owen Scully, deceased, for services rendered. The claim was allowed in part by the commissioners, and James Scully and others appealed to the circuit court. Judgment for claimant. Contestants bring error.
    Reversed.

      A. F. Freeman, for appellants.

      Cavanaugh & Burke, for appellee.
   Kuhn, C. J.

The claimant, Mary Galloway, is the daughter of Margaret and Owen Scully, both deceased. She presented a claim against the estate of Owen Scully for services, which consisted of washing done for the family and nursing, caring for and giving attention to her mother between 1913 and 1916, amounting. to $624. The claim was allowed by the commissioners on claims at the sum of $500. An appeal was taken to the circuit court by the two brothers and a sister of the claimant, and upon a trial before a jury the claimant was allowed the full amount of her claim and interest, amounting in all to $639.60, on which judgment was duly rendered. A motion for a new trial was made and denied by the trial court, and counsel here urge 14 assignments of error why the judgment should be reversed.

Counsel first contends that it was necessary to show that an express contract between the parent and daughter exists before the daughter can recover for services rendered by her to the parent. Counsel for appellee, in answering this contention, rely upon the case of Ashley v. Smith’s Estate, 152 Mich. 197 (115 N. W. 1052), also In re De Spelder’s Estate, 181 Mich. 153 (147 N. W. 589), and Maynard v. Schrumpf’s Estate, 192 Mich. 494 (158 N. W. 845). The rule is clearly stated in these decisions that in this class of cases it is not necessary to show that at a given time before the rendition of the services a formal contract was entered into, on the one part to work and on the other to pay, in order, to authorize a recovery. As it was said in Re Abel’s Estate, 173 Mich. 93 (138 N. W. 325):

“If the facts and circumstances attending the performance of the work and in its acceptance are sufficient to rebut the presumption that the services were gratuitous, and to authorize the inference that both parties acted under the understanding that they were to be paid for, the parent is liable.”

The difficulty with this case, however, is that the record does not satisfactorily show that at the time the claimed services were rendered the husband had relinquished his right to her services. The only testimony in the record on this point was when the husband was permitted to testify upon the stand:

“I have no claim whatever to my wife’s services; I don’t claim any whatever.”

In the case of Ashley v. Smith’s Estate, supra, an examination of the record discloses that the husband of Mrs. Bugbee, who rendered the services, was called to the stand to prove his consent to the services being rendered, and after repeated objections on the part of counsel, he was permitted to testify to having given his consent to his wife to make the arrangement for her services. Likewise in the case of In re De Spelder’s Estate, supra, it appears from the opinion by Mr. Justice Stone that the husband there, previous to the services being rendered, consented that his wife might have the fruits of her labor. It was there said:

“It will be noted in the testimony that almost immediately upon the arrival of claimant and her husband from Grand Rapids, and before any definite arrangement had been made, the contract testified to by the husband was entered into between claimánt and decedent, and that upon the same evening he consented to the arrangement and told his wife that she-might have the fruits of her labor in that regard. We think that the case is governed by the doctrine of this court in Slack v. Norton, 111 Mich. 213 (69 N. W. 497). It was there held that a married woman is entitled to the benefits of a contract by which she furnished board and care to another, where all the supplies were provided by her and the arrangement was entered into and carried out with the consent of the husband; that in a proceeding by the wife to enforce such a claim against the estate of a decedent the husband is competent to testify to the arrangement made with the deceased, since he does not stand to the wife as assignor of the claim, and is therefore not within the statute prohibiting the assignor from testifying to matters, which, if true, were equally within the knowledge of the deceased.”

Here no such testimony was introduced, and the only testimony is the claim or assertion made for the first time in court, after the claim is- in contest,' of the fact that he now makes no claim for his wife’s services. We do not think this was sufficient. In order that his testimony might properly be received, it should have been made to appear that at the time the services were performed, or the agreement to perform them was entered into, he gave his consent to her to make an arrangement for her services, and thus relinquished his right to her services. This not having been made to appear, the court should have sustained' the objection seasonably made as to the introduction of the husband’s testimony. As upon this record he was entitled to his wife’s services at the time they were rendered, the court should have directed a verdict against her claim on that ground.

Counsel for appellee also refer to Act No. 196, Public Acts of 1911 (3 Comp. Laws 1915, § 11478), which provides:

“Each and every married woman in the State of Michigan shall be absolutely entitled to have, hold, own, retain and enjoy any and all earnings acquired by any such married woman as the result of her personal efforts; and to sell or otherwise dispose of any and all such earnings, and to make contracts in relation thereto to the same extent that any such married woman could have or do if unmarried.”

Clearly this statute cannot be made to apply to this claim, as the contract in question is claimed to have been made in 1906, when claimant and her husband came to live with her parents. _ The statute cannot be made to be retroactive in effect.

It will be unnecessary to consider the assignments of error with reference to the denial of motion for new trial, for the reason that, upon this record, we are satisfied that because of the insufficiency of proof on the part of claimant to prosecute this claim, the judgment must be reversed, and a new trial granted, with costs to the appellants.

Stone, Ostrander, Bird, Moore, Steere, Brooke, and Fellows, JJ., concurred.


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    JOHNSON v. CAMPBELL.
    1. Fraud — Damages—Rescission.
    Where, upon discovery of the fraud practiced hy the seller of a moving picture business, the purchaser repudiates the contract by surrendering to the seller the property and demands back the amount paid, he is entitled in an action for damages for fraud to recover what he paid for the business together with the amount expended by him in carrying it on up to the time that the fraud should have been discovered.
    2. Same — Damages—Instructions—Evidence—Sufficiency.
    In an action for damages for fraud in the sale of a moving picture business, evidence held, sufficient to warrant an instruction based on the theory that plaintiff had rescinded his contract of purchase.
    3. Evidence — Admissibility—Conversations—Admissions.
    Conversations between the seller óf a moving picture business and certain of his employees in which the former told the latter that he was losing money in the business, are admissible in evidence as admissions against interest in an action by the purchaser of the business for damages for fraud.
    4. Fraud — Damages—Evidence—Sufficiency.
    In an action by the purchaser of a moving picture business against the seller for fraud, evidence held, sufficient to warrant the submission to the jury of the question whether or not the representations alleged to have been made by the seller as to the earnings of the theater were true or false.
    5. Same — False Representations — Defenses—Caveat Emptor.
    Where a person makes false representations as to material • facts which are-exclusively within his knowledge and another relies upon such representations to his injury, liability follows, and the person making the representations cannot defend an action for damages on the ground that the person injured should have been more vigilant and less credulous.

    6. Same.
    The doctrine of caveat emptor cannot he invoked as a defense to an action by the purchaser of a moving picture business for fraud where the seller falsely represents that the business has been a profitable one.
    Error to Wayne; Wiest, J., presiding.
    Submitted October 24, 1917.
    (Docket No. 126.)
    Decided December 27, 1917.
    Case by Ulous A. Johnson against Duncan A. Campbell for fraud and deceit. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      A. G. Pitts, for appellant.

      James H. Pound and H. H. Markham, for appellee.

      On right to rely on representations made to effect contract as a basis for a charge of fraud, see note in 37 L. R. A. 593.

   Kuhn, C. J.

This action arises out of a sale of a moving picture business located on Gratiot avenue in the city of Detroit. A judgment was recovered by the plaintiff in an action for damages for fraud against the defendant.

The plaintiff, who had been employed by the Pullman Car Company for a period of about 19 years, decided to engage in the theater business, and, through an advertisement which he saw in the Detroit papers, entered into negotiations with the defendant for the purchase of this theater, known as the “Unique.” The price asked for the theater was $6,000,. and the terms of payment, which were agreed upon by the parties, provided that the plaintiff was to pay to the defendant $1,000 in cash and assign to him a land contract, of the value of $1,300, which, payments were made, and further provided that the balance of $3,700 was to be paid at the rate of $100 per month on the 1st days of July, August, and September, 1914, $150 per month on the 1st days of October, November, and December, 1914, and thereafter at the rate of $200 or more on the 1st day of each month until the balance should be paid, with interest. The written contract also provided for the transfer of the lease, and that Mr. Campbell should not again engage in the show picture business or cater to colored people in the city of Detroit.

It is the claim of plaintiff that, at the time the negotiations were entered into as aforesaid, the defendant then and there represented to him that the theater had for a long period showed a net profit, over and above all expenses, of from $350 to $500 per month, and it is his claim that he took possession of the theater, and, with the assistance of Mr. Fred Finley, who had also been employed by Mr. Campbell as ticket taker, ran the theater for approximately a period of 30 days. It is his further claim that the business, instead of being a profitable one, was unprofitable, and that on or about the last of June, he surrendered the theater, and turned it back to Mr. Campbell who again took possession of the theater, as he claims because he was liable on the lease. The trial resulted in a judgment for the plaintiff in the sum of $2,530.

It is the contention of the defendant and appellant that the court erred in submitting to the jury the claim that the contract had been rescinded. The trial judge did charge the jury:

‘Tf, upon discovery of the fraud practiced upon him by defendant, the plaintiff repudiated the purchase, by surrendering what he had received to. defendant, and demanded back what he had paid, then he is entitled here, in case you find in his favor, to recover what he paid for the theater, together with the expense brought upon him in operating the same up to the time the fraud should have been discovered.”

There is no claim that this is not a proper exposition of the law, if there are any facts to sustain it; but it is earnestly contended that there is no evidence whatever upon which to base this part of the charge, and it is claimed that the evidence shows that the defendant took possession under the contract, and that there is no evidence that the plaintiff surrendered the theater, and that there was a rescission of the contract. We are unable to agree with this contention of the appellant, and we are of the opinion that there was sufficient evidence to submit the theory of a rescission of the contract to the jury. The plaintiff testified, after stating what the receipts had been during the period that he was in possession:

“Then I decided to give it up, and gave the keys to the manager to give to Mr. Campbell. I told Mr. Campbell that I had discovered that the deal was a fraud, and had decided to recover the money and property, if I could, by law; that it was a losing proposition from the start. He laughed in my face. I think I paid out $230 more than my receipts during the first four weeks, and that does not include my time. I retained the same manager that Mr. Campbell had after I took the theater, and the same employees.”

Mr. Finley, his manager, stated that, when Mr. Johnson quit, he gave the keys back to Mr. Campbell, and further stated:

“About the second week that Mr. Johnson had the place, Mr. Campbell dropped in there one morning and asked me how the business was. I told him it was very bad, and he laughed. He said: ‘Well, I will have the place back again very shortly.’ I told him that Mr. Johnson was thinking of closing the place up, and Mr. Campbell said: ‘On. no consideration let him close the place up. If he tells you to close, you telephone out to my house, and I will come, and your salary will keep going on. I don’t want to close this place up. Once it is closed up, it will be a dead one.’ ”

The testimony further shows that on May 19th Mr. Johnson visited the theater with the agent who had the sale in charge, and found the house packed, and it was on that night that he gave the agent $100 to close the deal. Mr. Finley stated that Mr. Campbell gave him 200 tickets and told him—

“to distribute them in the highways and byways, so that when Mr. Johnson, did come over there, there would be a crowded house. There was a couple of colored fellows, he gave them a bunch of tickets, and told them to go out and distribute them.”

Mr. Finley, and also Mr. Kelsey, who was another employee of Mr. Campbell at the time he sold to Johnson, testified as to conversations they had with Mr. Campbell, in which they claimed he said that he was losing money in the theater business. The defendant claims that he had no confidence in Mr. Finley, and purposely misled him, and that he was not bound to tell either Mr. Finley or Mr. Kelsey the truth, and that he had his reasons for not doing so. It is urged that the court erred in admitting this testimony, but we are of the opinion that it was properly admitted as showing an admission against the interest of the defendant.

It is next urged that the defendant’s books, which were offered in evidence, conclusively showed that the business of the theater had been a profitable one, and that no effort was made by the plaintiff to impeach this record testimony, and that the court erred, therefore, in refusing defendant’s request to charge that there is no evidence of any false representation of facts. The books of account unquestionably sustain the defendant’s claims with reference to the business being a profitable one; but in view of the testimony of Finley and Kelsey as to his admission that he had been losing money, and with the fact that immediately after turning the business over to the plaintiff, under the same management, and practically under the same conditions, the receipts immediately fell off, there was, in our opinion, sufficient evidence to warrant the submission to the jury of the question whether or not the representations which it is alleged he made to the plaintiff as to the earnings of the theater, and which related to a material fact, were true or false. See Miller v. Voorheis, 115 Mich. 356 (73 N. W. 383); Kimble v. Gillard, 177 Mich. 250 (143 N. W. 79).

It is further urged that the plaintiff should have made further investigations than the record discloses he did of the business which he was contemplating purchasing, and that the doctrine of caveat emptor should be here applied. This question has very recently had the consideration of the court in the case of Schweyer & Co. v. Mellon, 196 Mich. 590 (162 N. W. 1006), where Mr. Justice Fellows, speaking for the court, after reviewing some leading Michigan cases, said:

“Where one makes false representations of material facts, which are exclusively within his knowledge, and the other party relies upon them to his injury, liability for such false representations follows, and it does not lie in the mouth of the party perpetrating such fraud, when called to account, to say that his victim should have been more vigilant, should have been less credulous.”

We have examined all the assignments of error relied upon by appellant, and find them without merit. The issue involved in our opinion was submitted to the jury under proper instructions.

The judgment is therefore affirmed.

Stone, Ostrander, Bird, Moore, Steere, Brooke, and Fellows, JJ., concurred.