text:
    FELDMAN v. WEAR-U-WELL SHOE CO.
    1. Contract — Commission Agency — Principal and Agent — Breach — Directing Verdict.
    Where plaintiff entered into a contract to sell shoes for the defendant at a place named, on commission, and the former was required by the field agent who negotiated the contract to change the front of his shop or store to suit the business, and the work of the field agent was locating agencies which he had authority to establish on such terms as were called for by such agency contracts, and where there was a conflict of the evidence relating to the ground for canceling the contract on defendant’s part, the trial court did not err in. submitting the issues to the jury whether defendant had committed a breach of the contract, and whether the defendant was bound by such oral arrangements made by its field agent as to the changes in the store, and expense to which plaintiff was put in preparing to sell its merchandise.
    2. Same — Damages—Breach of Agency Contract.
    Whether or not the agent had authority to embody such arrangements in the contract, defendant was liable for such damages as were within the mutual contemplation of the parties.
    3. Same — Verdict—New Trial.
    And under the testimony, held, that a verdict for damages of $437.85 for selling plaintiff’s old stock, and alterations made in the front of his store, and other expenses of preparing to act as defendant’s retail agent, was not so excessive as to require the granting of a new trial.
    Error to Presque Isle; Emerick, J.
    Submitted January 12, 1916.
    (Docket No. 20.)
    Decided March 30, 1916.
    Rehearing denied June 23, 1916.
    Assumpsit by Sam Feldman against the Wear-U-Well Shoe Company, a foreign corporation, for damages for breach of contract. Judgment for plaintiff. Defendant brings error.
    Affirmed.
   Stone, C. J.

This is a suit in assumpsit to recover damages for an alleged breach of a contract appointing plaintiff defendant’s sales agent at Onaway, Mich. The damages claimed were for expenses incurred by plaintiff in altering his store to receive the defendant’s goods, for loss sustained in having to sell his old stock on hand to make room for the new stock, and for labor and expenses incurred in securing certain lists of names and copying the same for the defendant.

The defendant and appellant is an Ohio corporation authorized to do business in Michigan. Its business consisted of selling direct to the customer, at retail, boots and shoes manufactured by it at Columbus, Ohio. It did this by establishing stores in various towns and cities, each store in charge of a local agent. A general agent, one A. W. Prindle, had charge of certain territory and the stores in it. His duties and powers, as testified to by him, will be hereinafter stated. The contracts were made on printed blanks furnished by the defendant.

Some time prior to December 28, 1912, the plaintiff, who had a small store and shoe shop at Onaway, wrote to Mr. Prindle, defendant’s said agent in control of the territory in which Onaway was situated, requesting to be appointed local agent at that place. On said December 28th Mr. Prindle was at Onaway, and he, in behalf of the defendant, and the plaintiff, signed the following contract:

“Articles of Agreement entered into this 28th day of December, 1912, by and between the Wear-TJ-Well Shoe Company, hereinafter described as party of the first part, and Sam Feldman, hereinafter described as party of the second part, witnesseth:
“(1) Party of the first part will hereby designate and create the party of the second part as its sales agent at Onaway, State of Michigan, to sell and dispose of the goods hereinafter described, consigned to him, party of the second part, as such sales agent, and .subject to the terms hereinafter set forth.
“ (2) The goods herein contemplated to be consigned to the party of the second part by party of the first part to consist of shoes and rubber goods, findings and fixtures, furnished, by party of the first part and invoiced by it, the amount of such consignment to be at all times at the option of the party of the first part. The party of the first part will also furnish said second party certain advertising matter, printed and otherwise, consisting of circulars, papers, bills and other forms of advertising which the first party may select at its option. It also will furnish to said second party certain interior and exterior decorations for use at the salesroom where said goods will be stored. As said stock is from time to time depleted ,by sales made therefrom, it is to be replenished and added to from time to time at the option of the first party in such amount and of such quality as the first party may determine.
“ (3) Party of the second part is to keep said stock in good and merchantable condition and is to be responsible to the party of the first part for any loss or damage resulting to said goods, or a part thereof, from any other cause than that of accidental fire.
“(4) Party of the first part is to keep said stock insured in its name and to pay the insurance payments thereon.
“(5) The second party is to furnish room for said merchandise, and all transportation, operating, and maintenance expense and charges shall be borne by the party of the second part, including all taxes and assessments which may be levied thereon, either through or by virtue of State law or any municipal ordinance or regulation.
“ (6) The second party further agrees to be responsible to the first party for all moneys received from the sale of said goods until the same has been deposited in a bank to be selected by said first party, and a banker’s certificate given for each separate deposit. Proceeds of such sales to be the property of the party of the first part, and the deposit of the same to be according to such method and reported to said party of the first part upon blanks and forms prepared by it.
“ (7) The second party agrees at all times to follow the instructions and use the accounting systems provided by party of the first part.
“(8) The party of the second part further agrees to deliver and surrender said stock of goods and each part thereof at any. time after having received fifteen days’ notice to do so from the party of the first part. Second party further agrees to execute and deliver to the first party a bond in such amount and upon such condition for the performance of this contract, upon his part to be performed as may be required by said first party.
“(9) In consideration of the employment of said second party by said first party, said second party further agrees not to sell or deal in any other shoes than those obtained from the first party during the term of this contract, and in case of violation of this part of this agreement by said second party he agrees to forfeit and pay to the said first party the sum of $500 as liquidated damages therefor. The second party further agrees that in the event this contract bé terminated for any reason the second party will not engage in or be employed by or in any way connected with the business of selling shoes at either wholesale or retail, within said county of Presque Isle, State of Michigan, for the period of six months next succeeding the termination of this contract.
“(10) For and in consideration of the services of said party of the second part, and agreements on his part to be observed and maintained, the first party agrees to pay to the second party a compensation as follows: _ The same to be computed upon a percentage basis, being 12 per cent, of all the sales of shoes sold at $2.98 per pair or higher, and 12 per cent on all shoes sold at $2.48 per pair or lower. The computation and payments of such compensation to be made therefor monthly, and the amount thereof to be paid by the first party to said second party, but second party has no right to deduct the amount thereof from the amount of sales, which at all times are to be deposited to the credit of the first party in full amount, as sold.
“(11) The said second party further agrees to sell all goods included in this agreement for cash. Should, he extend credit to any one, he agrees, to pay cash to party of the first part out of his own funds at the time.of sale.
“In witness whereof party of the first part, in its proper officers, have hereunto set its hand and seal, and the party of the second part has set his hand on the day and year first above mentioned.
“The Wear-U-Well Shoe Co., “A. W. Prindle.
“Sam Feldman.
“Witnessed by A. W. Prindle.
“The location of the above is Main street.”

It was claimed by plaintiff that on the day the contract was signed he and Mr. Prindle visited a local agent of the Massachusetts Bonding & Insurance Company with a view of giving the bond required by the contract; that after some conversation with the bonding company’s agent Mr. Prindle said to plaintiff that defendant would get a bond from the same company for the plaintiff for $5 a year, and said to plaintiff:

“You will get a letter from the bonding company inside of a week or a few days. When you get the letter from the bonding company, send your check for $5 and sign with a witness, and then your bond will be accepted.”

In a letter dated January 8, 1913, the general agent of the bonding company sent to the plaintiff the bond to sign, and he did sign it, and sent it with his check for $5 to the Massachusetts Bonding & Insurance Company at Columbus, Ohio. The bonding company received the plaintiff’s check and cashed it, and the paid check was produced upon the trial. It was dated January 11, 1913, and on January 15, 1913, the defendant wrote to the plaintiff as follows:

“We wish to acknowledge receipt of contract for opening a branch in your city. We will ship the goods as soon as we possibly can, and wish you would please notify us when they come to hand. We will then advise you the day of opening.”

The defendant never shipped plaintiff any goods, and he heard nothing more about the matter until he received a letter from Mr. Prindle, dated February 24, 1913, in which he said:

“I inclose you a bond to get some one who is responsible for $1,000 free from exemption to sign and return to me at Bay City so I can look it over; then we can open you up.”

On March 12, 1913, Mr. Prindle went to Onaway, and while he was there called upon the plaintiff, and according to plaintiff’s testimony the following conversation occurred:

Mr. Prindle said to plaintiff:
“I want you to get personal bonds, and I will give you the shoes.”

The plaintiff replied:

“I give you one bond, and ain’t got my check back, and I couldn’t give you twice bond.”

On direct examination the plaintiff testified:

“Q. Did you tell him that you would not — you would give him a personal bond?
“A. Yes, sir. '
“Q. If that was straightened out?
“A. Yes, sir.
“Q. And had the company notified you before that time your bond had been canceled?
“A. No, sir.”

On cross-examination the plaintiff testified:

“I told Mr. Prindle if I will get my check back again I will give him a personal bond.”

This was the second trial of the case. Upon the former trial Mr. Prindle had testified. He died before the trial we are dealing with, and his testimony taken upon the former trial was read by the court and the official stenographer. Upon this subject Mr. Prindle’s testimony was as follows, on direct examination:

“It was after February 25th when I met Mr. Feldman in his store and asked him for a new bond. He said he wouldn’t give it to me; he has given one, and that was all he was going to give.”

It is undisputed that after the conversation between Mr. Prindle and the plaintiff on that occasion, and while Mr. Prindle was at Onaway, he entered into a contract with W. H. Fish to become the defendant’s agent at Onaway, under date of March 12, 1913, to put in a stock of shoes for Mr. Fish and appointed him manager of the defendant’s company at Onaway. It is the claim of the plaintiff that he was not informed at any time that the bonding company had refused to accept his original bond until he received a letter dated March 14, 1913, from the defendant, in which the defendant said:

“The Massachusetts Bonding Company for some reason refuse to accept the bond for which you made application, and we have written Mr. Prindle to call and see you and arrange for personal bond.”

It will be observed that before this letter was written Mr. Prindle had given the agency to Mr. Fish. The plaintiff further testified that afterwards he received a letter from the bonding company bearing date April 2, 1913, in which the company said:

“Inclosed find check for $3.90, the same being for the unearned premium on your bond in favor of the Wear-U-Well Shoe Company, the earned premium on the same from the time the bond was issued to date of cancellation being $1.10.”

A material question in the case is as to the duties and powers of the defendant’s agent, Mr. Prindle. Upon that subject his testimony upon the first trial, in February, 1914, as read into the record in the instant case, was as follows: After referring to his retirement as district manager for the defendant on account of ill health in January of that year, he said:

■ “Before that I had been in their employ ever since they started business. My territory was the southern peninsula. My business with them was the contracting with people for running stores, to audit stock and see if it was all there, and to keep them in shape, and to do a general business:”

On cross-examination he testified as follows:

“I was with the Wear-U-Well Shoe Company ever since they were organized, and before that for ten years. They organized the company four years ago the 27th of May. I was with the company before that for ten years. The Wear-U-Well Shoe Company is a corporation with its headquarters at Columbus, Ohio. Their general business is manufacturing shoes and selling tnem at retail direct to customers. Their method of doing that was appointing agents and having agents for their distributors in the local places. Ónaway was one of them. There were 100 of these stores in the State the last I heard. There is more than that now. I had to look after 47, outside of the two south tiers of counties of Michigan. I had all the rest of the southern peninsula. My business was the managing stores, contracting with people and checking them up to see if they had the goods, and doing the general business that was to be done. I looked after all the business in Michigan in the territory I described. I had a written contract to do that work. The contract did not state exactly all the authority 1 had, but part .of it anyway. I haven’t the contract with me. It is in existence.' There is one at my house in Pinconning, and one down at the headquarters at Columbus. They have the original, and I have a copy. ■ I haven’t it with me. I made contracts around through Michigan with the distributors or local managers, and, when I sent the company the contract and bond for the stock, they sent it.
“Q. Now, you made contracts with individuals with whom you could put in a stock according to the circumstances, did you not, in the different places?
“A. Well, I sent out about the same kind of stock to every town.
“Q. Yes; but in making the arrangements you had the authority to make arrangements to put in these stocks and handle them, didn’t you?
“A. I could make a contract with whoever I wanted to.
“Q. You signed the contract for the company, didn’t you?
“A. I signed the contract for the company, but I couldn’t contract for anything that wasn’t on the contract.
“Q. What is that?
“A. I couldn’t obligate them to anything only what was on the contract.
“Q. If it became necessary to arrange, make advance arrangements to put in a stock, you had the authority to do that, didn’t you ?
“A. Not unless they would accept it.
“Q. What is that?
“A. Not unless they would accept it, if it was outside the contract.
“Q. In making the contract, and afterwards, you had authority to make the arrangements, didn’t you, in order to get the stock in?
“A. Give me that over again.
(Last question read by stenographer.)
“A. I had authority to make all the arrangements the contract would call for.
“Q. Yes; you had authority to may any arrangements to get in the stock and get a place for the stock?
“A. No; I didn’t have all that authority, because, if I had to put a stock out to get a stock in, I wouldn’t had no authority to have done that.
“Q. No; I didn’t mean that at all. In many places it was necessary for you to make arrangements to clear out the store and get ready for it?
“A. That was the local man’s business to do that.
“Q. You were the only one who had any authority to make any change at all, wasn’t you, in Michigan?
“A. I had the authority to put in the stocks. The local man had to make the arrangements for the stock.
“Q. You made no preliminary arrangements you say?
“A. No, sir; I had nothing to do with making arrangements for putting in a stock; that was the local man’s business. If he wanted my stock and made arrangements for it, why, he got the stock; if he didn’t, why, he didn’t get it.”

Upon the trial, against the objection and exception of defendant’s counsel, the plaintiff testified that in his arrangement with Mr. Prindle he was told that he must change his storeroom in the front by taking out the window and putting in plate glass, and by taking out the partition and papering the store and painting it. He further testified:

“Then I says to Mr. Prindle, I couldn’t afford to put in that expense in the store; I wouldn’t sign the contract; and he said: ‘When we will send you the shoes you give us the first Saturday night commission, and we will pay all the expenses what it will cost.’ ”

He further testified that in his arrangement with Mr. Prindle the latter told him that he must sell out the rubbers and shoes and stock on hand before the Wear-U-Well Company’s stock came on; and it was agreed that he was to close out and get the stock he had in there out before the shoes came, which would be in about two weeks. It is the further claim of the plaintiff, and testified to by him, that following the' agreement and understanding that the plaintiff had with defendant’s manager in reference to fixing over the store and the selling out of the stock, and the procuring of the list of names for the defendant, he also had to get ready to take in the stock of the defendant; that he sent for the plate glass, took out the partition, papered the store, moved his shoeshop into the back room, and got the store and everything ready in the manner he was directed to do; that the repairs necessitated the expenditure of $75; that in the sale of the stock which he had on hand, and which he was required to dispose of, as under the contract he could sell no other goods of the character furnished by the defendant during the time of the contract, he was obliged to sell at a sacrifice, and he lost on the stock $300 by having to close it out in so short a time.

The case was submitted to the jury in a very full charge, in which the court called attention: First, to the question of the conflict between the testimony of the plaintiff and Mr. Prindle relative to the bond; and, second, upon the subject of damages. The trial resulted in a verdict and judgment for the plaintiff in the sum of $437.85.

It is claimed by the defendant, and it seems probable from the evidence in the case, and from the charge of the court, that there were embraced in the verdict the loss on the old stock sold, $300; repairs to building, $75; for names obtained, $42 — making a total of $417' interest on this sum for one year at 5 per cent., as directed by the court in case a verdict was found for the plaintiff, $20.85 — making the total of the verdict. There was a motion for a new trial, which was denied, and exception duly taken, and the case has been brought here by the defendant for review.

The numerous assignments of error of the defendant are discussed by its counsel under four heads:

(1) That the defendant was not in fault in canceling the contract and appointing another agent.
(2) Defendant was not chargeable with any arrangement that its agent, Mr. Prindle, ’ might make with the plaintiff that was not embodied in the written contract submitted tó, and approved by it.
(3) If defendant were in fault in canceling the contract, it was not such fault as to subject it to damages.
(4) If the defendant’s action canceling the contract subjects it to damages, what should be the measure of those damages? *

1. Whether the defendant was in fault in canceling the contract and appointing another agent depends upon whether it wrongfully canceled the contract, and whether the jury believed the testimony of the plaintiff or that of the defendant’s agent relating to the proposed new bond. That question was fairly and fully submitted to the jury by the trial court in a very elaborate charge. We think it presented purely a question of fact, and, the jury having found in favor of the plaintiff, we see no reason for disturbing the verdict or judgment upon that ground.

2. We have set forth the testimony of Mr. Prindle covering the questions of his duty and authority as general agent for the defendant. We might dispose of this branch of the case by saying that such testimony presented a question of fact for the jury. Whatever may be said of the authority of Mr. Prindle to^ go outside the contract in matters not covered by that instrument, it is very apparent that, if the defendant wrongfully canceled the contract and deprived the plaintiff of the benefit of it, the defendant must have known by its acquaintance with the nature of the business to be engaged in that the plaintiff would necessarily suffer considerable damage as a natural result of that cancellation. Certain damages would naturally spring from a breach of the contract. For instance, the defendant must have known that, if the plaintiff was proceeding in accordance with the terms of the contract, he was making the necessary arrangements to receive the defendant’s goods, to make room for them in his store, and to place the same on sale under advantageous conditions, and, if deprived of that right, that damages would naturally follow.

3. The third and fourth propositions of the defendant may well be considered together. What we have already said upon the subject of damages applies here. The damages should be such as would reasonably compensate the plaintiff for the injury which he had suffered.

“In cases of breach of" contract the damages ‘should be such as may fairly and reasonably be considered either arising naturally, i. e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it.’ ” Hopkins v. Sanford, 38 Mich. 611, 613.

See, also, Tracy v. Butters, 40 Mich. 406, citing Allison v. Chandler, 11 Mich. 542; Drysdall v. Smith, 44 Mich. 119 (6 N. W. 211) ; Murdock v. Roe, 186 Mich. 233 (152 N. W. 969).

We have examined the charge with great care upon this branch of the case, and are of opinion that the question was properly submitted, and that the damages recovered were neither unreasonable nor excessive.

After a careful examination of the entire case, we cannot say that any of the alleged errors have resulted in a miscarriage of justice.

The judgment of the court below is therefore affirmed. ' '

Kuhn, Ostrander, Bird, Moore, Steere, Brooke, and Person, JJ., concurred.


source: Caselaw Access Project

author: Stone, C. J.

license: Public Domain

text:
    SORENSON v. CHARLEVOIX ROCK PRODUCT CO.
    1. Principal and Asent — Commissions—Sales.
    Where plaintiff brought an action for commissions that he claimed to have earned in selling stocks and bonds, and the evidence was in conflict relative to the terms of his contract, defendant claiming that he was only to receive pay for such deals as were actually closed by plaintiff, who testified that his agreement provided for commissions on such sales as he caused by introducing prospective buyers, the trial court was correct in leaving the question of liability to the jury.
    2. Same — Trial—Instructions.
    There was no ground for reversal because the trial court refused defendant’s requests for instructions that plaintiff could not recover, that he had not shown that either alone, or by the aid of any other person, he had sold any stock; that in order to recover he must establish either that he sold some 'of the capital stock owned by defendant or that he, with others working with him, sold stock belonging to the defendant for which he received no commission, and that plaintiff would not be entitled to any commission for sales made by any other person or persons after he left defendant’s employ..
    3. Same — Declaration—Bill oe Particulars.
    Defendant, not having demanded of plaintiff a bill of particulars, could not, on the ground that the special count in the plaintiff’s declaration merely related to bonds, prevent a recovery for stock sold which was open to plaintiff under the count for work and labor of the common counts declared on.
    4. Same — Contract—Construction.
    Nor was the defendant entitled to the instruction that plaintiff could not recover for commissions on sales of stock to persons whom he introduced and to whom sales were made after he left defendant’s employ.
    5. Same — Right to Compensation.
    And even though stock belonging to individual officers or agents was transferred to the prospective customers, defendant could not evade liability on that basis.
    Error to Wayne; Hally, J.
    Submitted January 10, 1916.
    (Docket No. 74.)
    Decided March 31, 1916.
    Assumpsit by Charles Sorenson against the Charlevoix Rock Product Company, a corporation, for broker’s commissions. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Fred H. Aldrich and Walter M. Trevor, for appellant.

      James H. Pound, for appellee.
   Stone, C. J.

This is an action of assumpsit to recover for commissions claimed to have been earned by the plaintiff on sale of stock and bonds for the defendant. The declaration contained a special count to the effect that defendant, through its proper officers, entered into an agreement with the plaintiff, in February, 1911, whereby he was to act as its solicitor for the purpose of securing purchasers of the stock and bonds of the said corporation, and it agreed to pay to said plaintiff a commission of 20 per cent, on any stock of the said defendant company sold to any person or persons introduced to, or brought in communication with, the officers or agents of the defendant by or through the efforts of the plaintiff. It was further alleged that whereas, prior to October 16, 1911, the plaintiff introduced to and brought the officers and agents of defendant into communication with certain persons therein named, for the purpose of interesting said persons in the purchase of stock and bonds of the said defendant company, and whereas thereafter the defendant, through its officers and agents, did sell to said persons 2,800 shares of stock in said defendant company, receiving therefor a valuable consideration, and whereas the par value of said stock is $10 per share, there was due to the plaintiff the sum of $2 for each and every share of said stock sold by defendant, through its officers and agents, to said named persons as aforesaid, which had not been paid although demand had been made for same, etc. There were also added the usual common counts, including the count for work and labor done and performed by plaintiff for defendant. The plea was the general issue. Upon the trial there was a sharp conflict, between the plaintiff and defendant, in the evidence as to what the contract was between the plaintiff, and E. L. Buell, the secretary and treasurer of the defendant. There was no claim made by the defendant upon the trial that Buell exceeded his authority as an officer, or that he was not authorized by the defendant to make any contract which he did make with the plaintiff; and, as stated by the trial court in its charge to the jury:

“You have an issue, and that is, was a contract made as the plaintiff says it was?”

The plaintiff testified, among other things, that he first met Mr. Buell in connection with said matter at the office of the defendant, 610 Majestic Building, Detroit, on February 26, 1911. He testified that Mr. Buell had before that time sent him a letter, and that he called to see him in response to that letter. Plaintiff testified:

“I went up and asked what kind of a proposition he had, and he said, ‘I would like you to go to work for the Standard Lime & Cement Company.’ At that time it was called the Standard Lime & Cement Company, but was afterwards changed to the Charlevoix Rock Product Company. I said I would be glad to go to work for them, and asked him on what condition.”

A letter seems to have been here introduced in evidence and marked as an exhibit. It is a peculiarity of this record that, while it refers to many exhibits, not one of them is set out, and we are unable to know what any of them contained.

The plaintiff continued his testimony:

“Mr. Buell wanted me to go to work for the Standard Lime & Cement Company, that was later the Charlevoix Rock Product Company, and I asked him how much it was, and he said that he would give me 15 per cent, on all bonds sold and a bonus of 50 per cent, that I could either keep for myself or give to the customers. That I gave to the customers. I thought they were more entitled to it than I was; and he would give me 20 per cent, of the stock sold and 40 per cent, at par. Stock was then selling at 50 per cent.; that was $5 a share.”

He then testified that he started out and commenced to work for the defendant. It was conceded, during the trial of the case, that the Charlevoix Rock Product Company and the Standard Cement and Lime Company were one and the same company; the name having been changed. The witness testified at great length about the work which he did in selling stocks and bonds, and he testified that, in a subsequent conversation with Mr. Buell, one I. N. Aldrich was referred to by Mr. Buell as a good “closer.” He testified:

“I got acquainted with Mr. Aldrich through Mr. Buell. Mr. Buell told me that he had been interested with him in the Marengo Cement Company, of Marengo, Indiana; that he was a quick closer and could close up quicker than I could, and for, me to look after the prospects, and I would get my 20 per cent, commission anyhow. Mr. Aldrich would close them up for me, and I could pay Mr. Aldrich 5 per cent, on my commission that I would get from Mr. Buell.”

Then he proceeded to testify to numerous dea]s in which Mr. Aldrich became interested, and gave testimony generally in support of the declaration. We gather from the plaintiff’s testimony, generally, that he does not claim that he ever, personally, closed the sale of any stock with any of the persons that he interviewed, but that he brought to the office and introduced such persons, who were taken charge of either by Mr. Aldrich or Mr. Buell, and that sales were consummated. He does claim, however, and testified to having sold some of the bonds of the defendant company.

On behalf of the defendant, Mr. Buell testified that the plaintiff never made a sale of stock for the defendant and was never paid any money by the defendant at any time; that what stock he did sell, or assist in selling, was private stock belonging to individuals; and he denied that he had any agreement or arrangement with reference to Mr. Aldrich, as testified to by plaintiff, he claiming that the persons, or solicitors who closed the transactions, were the ones who were entitled to the commissions. On his direct examination, after testifying to his connection with the defendant company, he said:

“Sorenson first.began to sell the stock of the Charlevoix Rock Product Company in the latter part of February, 1911. He worked for the company until about the first of .November, the same year.
“Q. Did he have any contract with the company?
“A. No, sir; I paid Sorenson for the commissions upon the sales of any business that he did.”

Upon cross-examination, his attention being called to a letter, apparently the one about which plaintiff had testified, the following occurred:

“Q. Now, calling your attention to this letter that is dated October 20, 1910:
“ ‘Mr. Charles Sorenson,
“‘No. 916 Bellevue Avenue,
“ ‘Detroit—
“‘My Dear Mr. Sorenson:
‘“You will remember the writer having had some talk with you regarding a cement proposition at Charlevoix, Michigan. We now have our bonds ready and are in a position to pay a good liberal cash commission, as well as 50 per cent, stock bonus.’
“Now, who was ‘we’?
“A. It is the company.
“Q. What company?
“A. The Charlevoix Rock Product Company.
“Q. Now, when you said, ‘we have a proposition,’ you meant the company had?
“A. Yes, sir.
“Q. Well, in response to this (indicating), Mr. Sorenson at some time did come in to see you?
“A. Yes, sir.
“Q. Did you tell him, T want to hire you for myself,’ then, yes or no?
“A. No, sir.
“Q. Did you tell him who you did want to hire him for?
“A. Yes, sir.
“Q. Who did you say you wanted to hire him for?
“A. I wanted him to sell bonds for the Standard Cement & Lime Company; that is now the Charlevoix Rock Product Company. We fully decided not to make the cement, and changed the name.
“Q. At any rate, ‘We now have our bonds ready and are in a position to pay a good liberal commission as well as a 50 per cent, stock bonus’?
“A. Yes, sir; that is what we paid him for all he sold.
“Q. That is, you paid him a cash commission?
“A. Yes, sir.
“Q. A 50 per cent, stock bonus?
“A. Yes, sir; allowed that.
“Q. All right, you don’t call that a contract?
“A. No, sir; that is not a contract. * * *
“Q. Now, then, you did agree for the company to give Mr. Sorenson 15 per cent, on the sale of bonds?
“A. Yes, sir.
“Q. Did you agree with him to give him 20 per cent, on the sale of stock?
“A. Yes, sir.
“Q. Did you agree that in case any of the stock was sold at par that there was 40 per cent, due him?
“A. I explained that.
“Q. Yes or no to that question.
“A. No, sir; the company never paid only 20 per cent.
“Q. How soon after the sending of that letter, that I called your attention to, did you see Mr. Sorenson?
“A. I could not say. It was some little time after that he came in.
“Q. Well, was it answered in person?
“A. Yes, sir. * * *
“Q. Well, as a matter of fact, as I understand your testimony to Mr. Trevor, the only thing that Mr. Sorenson did was to sell two bonds for the Charlevoix Rock Product Company?
“A. Yes, sir.
“Q. To Mrs. Emig, and I think to Mr. Martin? If he sold bonds for the price that the company wanted, then the 50 per cent, of stock was his?
“A. It was an option to use the stock as he saw fit. * * *
“Q. So that he never sold — Mr. Sorenson never sold a share himself from your standpoint, and was entitled to no compensation for a share of stock while he was in the Charlevoix Rock Product Company?
“A. No, sir.”

For the bonds sold, about which there seems to be no question, the witness testified that he paid the plaintiff by his own personal check; he saying:

“I paid him out of my own personal check book. The company settled with me. * * *
“Q. Isn’t it a fact that you told Sorenson that any person that he got, that bought stock or bonds, that the commission was his, no matter who closed it?
“A. No, sir; I never told him that.”

There was further testimony of the same character, and the plaintiff testified in rebuttal that his contract was never changed.

The case was submitted to the jury by the trial court in a very clear charge, in which the court, among other things, used the following language:

“It is the claim of the plaintiff here that some time in the year 1911 he entered into the employment of the defendant, the Charlevoix Rock Product Company, at that time known by a different name, and that the terms of the contract he entered into were these: That he was to sell the stock, or the bonds of the company; that on the sale of stock he was to get 20 per cent.; that on the sale of bonds he was to get 15 per cent.; that he was to sell the stock at $5 per share; and that he further claims that if he sold at par he was to get 40 per cent.; that he was to use his endeavors to interest parties in this proposition; that, having gotten them very thoroughly interested in the proposition, he was then to report his prospects as probable purchasers to the company and the ‘closer-in,’ or somebody with more experience or more knowledge of the affairs of the company, was to go forth and close the transaction; but that he was, nevertheless, to receive the commission for the same for the work that he had done in leading the prospective purchaser that far in the transaction.
“Now, that is the contract in brief words, that the plaintiff claims was made; that is the understanding the plaintiff claims he had when he entered into the work. Now, if you find that such an understanding was reached, of course, that sort of an understanding would constitute a contract. Now, the defendant says that such was not the case at all, that the terms - of the employment were different from what the plaintiff says the terms were, and that the man was not engaged either as to the terms or manner in which he claims he was engaged, and that as to each different transaction a full understanding was had with respect to each particular transaction. Now, it is for you to say whether the plaintiff has maintained his case, or whether the defendant has satisfied you that the situation was as defendant claims it was. (If you find that plaintiff was engaged as the plaintiff claims he was engaged, and that as a result of his labor stocks or bonds were sold, whether those stocks or bonds were out of the treasury of the company or of some person else, if the sale of them resulted from his having reported them to a superior, and the superior officer having taken advantage of his work and sold to the purchaser a different piece of property from the piece of property that the plaintiff had been attempting to sell, the plaintiff, nevertheless, would be entitled to-compensation which the contract said he should receive for .that particular sale.) - Now, in giving you this kind of a statement, do not misunderstand me. I am not finding any facts for you; I am not saying that the officer of the company did the things; I am saying, if you find that to be so, then certain results would follow. It is for- you to say whether or not that particular thing did happen, because the testimony with respect to that has been placed before you. You have seen the parties upon the witness stand.”

The jury returned a verdict for the plaintiff in the sum of $851.40, and judgment was entered thereon.

At the close of the plaintiff’s evidence, and again at the cloke of all the evidence, the defendant moved the court for a directed verdict in its favor, upon the ground that there was no evidence before the jury that showed any liability on the part of the defendant ; that, taking the plaintiff’s own testimony that he sold some bonds or stock, there was no testimony that he sold any stock that the defendant ever got a dollar for. Th'e defendant also requested the court to charge the jury as follows: (1) That under the proofs in the case the plaintiff could not recover. (2) That the plaintiff had not shown that either alone, or by the aid of any other person, he sold any of the stock of the defendant for it, and is not entitled to recover. (3) That in order for plaintiff to recover a verdict it was necessary for him to show either that he sold some of the capital stock of the defendant owned by it, or that he, together with others working with him for that purpose, sold capital stock of defendant belonging to it, for which he did not receive any commission. (4) The plaintiff would not be entitled to any commission for any sales of stock made to any person or persons after he left the employment of the company.

There was a motion for a new trial entered by the defendant based upon the following grounds:

(a) Because the verdict was contrary to the evidence. (5) Because there was no testimony to sustain the verdict, (c) Because the proofs introduced showed that the plaintiff performed no services for the said defendant for which he was entitled to any compensation under the pleadings and evidence in said cause. (d) Because the proofs in said cause show that, if any services were performed by said plaintiff for any person whomsoever in relation to the capital stock of the defendant, such services were performed for Elbert L. Buell, and not for the defendant, (e) Because the proofs in said cause show that plaintiff did not sell any capital stock issued for the defendant, but that, if he had anything to do whatever with the sale of such capital stock, it belonged to private parties and not to the defendant. (/) Because the proofs in said cause show that Elbert L. Buell paid the plaintiff in cash for all services performed by him for any person in the sale of the capital stock issued by the defendant. (g) Recause, under any view of the facts shown in the evidence, the verdict rendered in said cause was excessive. (h) Because the verdict in said cause was contrary to law. (i) Because the verdict in said cause was contrary to the instructions upon the law as given to said jury in open court, O') Because the court erred in refusing to direct a verdict in said cause in favor of defendant at the close of the evidence therein offered by the plaintiff, also at the close of the testimony in the case.

The court in denying the motion for a new trial used the following language:

“Briefly, the facts are that the plaintiff was employed to work for the Rock Product Company. The man who hired him was authorized to effect that sort of an agency. Under the terms of this employment, all prospective buyers discovered by him brought a certain commission to him, even though the sale was actually brought about by some other. It appeared that some sales were made subsequently, but it was the defendant’s claim that this stock was not the stock of the company, but was the stock owned by the agent who had hired Sorenson. Plaintiff was never, according to his testimony, acquainted with the difference in the ownership of the stock. His testimony was to the effect that he assumed that his work regarding it was no different from his work respecting other stock. The whole matter was distinctively a question of fact —rather various questions of fact, and I do not see how the defendant could justify itself by putting in a position of trust with power t'o employ agents, an officer, and then excuse itself for paying a commission on the sale of an agent’s personal property when the seller was not apprised of the difference in the ownership of the property he was selling. Under the theory of the plaintiff as presented to the jury, it would have been possible for a verdict much in excess of this amount to have been returned, and the motion for a new trial will be denied.”

The defendant duly excepted to the reasons given by the trial court in overruling the motion for a new trial, and has brought the case here upon writ of error.

The first eight assignments of error relate to the rulings of the court upon the admission of testimony. We have read the record with care, and are of opinion that there was no reversible error in the rulings of the court upon that subject. We do not think the assignments or error upon those rulings present a meritorious question.

The remaining assignments of error, beginning with the ninth, relate to:

(1) The court’s refusal to direct a verdict for the defendant; (2) the refusal to grant defendant’s several requests to charge; (3) the court’s misstatement of the alleged contract; (4) the erroneous statement by the court of the plaintiff’s theory of his contract to the utter exclusion of the defendant’s theory; (5) the court’s denying of defendant’s motion for a new trial.

1. As we have already indicated, in our opinion there was such a conflict in the evidence of the respective parties that a question of fact was raised for the consideration of the jury as to what the contract was. In our opinion, the court did not err in refusing to direct a verdict for the defendant.

2. We find no error in the refusal of the court to give defendant’s requests above referred to.

The first, second, and third requests to charge contained no merit for the reason, already stated, that a question of fact was presented for the jury. Defendant claims that the third request to charge raises the point that plaintiff could not recover for sale of bonds, because there is no such claim in the declaration. Such evidence was competent and relevant under the count for work and labor. No bill of particulars of plaintiff’s claim was demanded in so far as the record shows.

The fourth request to charge was properly refused, because if the jury believed the claim of the plaintiff he was entitled to commissions for sales to persons whom he brought to, and introduced to, the officers of the defendant, and whether a sale of stock was actually made before or after he left the employment of defendant would be a matter of no importance.

3. The third and fourth points of defendant’s position may be considered together. We have set. forth so much of the charge as purports to contain the substance of the contract claimed by the plaintiff and the claim of the defendant relating thereto. We find no error in the charge, and are of opinion that the trial court was correct when it gave that portion of the charge embraced in parenthesis, to which the twelfth assignment of error refers. If the plaintiff was correct in his claim that he was hired by the defendant, through its secretary and treasurer, to sell stocks and bond's of the defendant, or to introduce prospective purchasers to the defendant where sales were consummated, as claimed by plaintiff, we do not think the defendant could escape liability by substituting stock or bonds of individuals, where the plaintiff had in good faith negotiated for the sale of the stocks or bonds of the defendant company, as claimed by him.

Lastly, we think that the trial court’s denial of defendant’s motion for a new trial was not erroneous, for the reasons given by the trial court.

We have examined this entire record with care and find no reversible error therein.

The judgment of the court below is therefore affirmed.

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


text:
    FRIEND v. SMITH.
    1. Specific Performance — Vendor and Purchaser — Part Performance.
    A contract fully performed on the one side, to convey to a daughter and her husband defendant’s homestead in consideration that the former would give up their farm, move to the home in the village and occupy it with defendant, and make some improvements named, the deed to be executed when the improvements were completed, . is enforceable against the grantor though it was not in writing.
    2. Same — Equity.
    It is not a matter of course to decree specific performance; a sound discretion is exercised, and the same must not be arbitrary and capricious, but regulated on judicial grounds; where the terms are certain and definite, the acts of the parties and performance on the one side take it out of the statute.
    Appeal from St. Joseph; Knowlen, J.
    Submitted
    January 10, 1916.
    (Docket No. 82.)
    Decided March 31, 1916.
    Bill by Fred L. Friend and another against Charles E. Smith, impleaded with others, for a decree setting aside certain deeds and for other relief. From a decree for complainants, defendant Smith appeals.
    Affirmed.

      Harry. C. Howard and Theo. T. Jacobs, for complainants.

      Edward J. Anderson, for defendant.
   Stone, C. J.

In this cause the bill of complaint was filed in July, 1912, to set aside, as fraudulent, a deed of certain premises executed by the defendant Alma E. Smith to the defendant Cora Cromer, bearing date May 28, 1912, and also of a deed of the same date executed by said Cora Cromer to the defendants Alma E. Smith and her husband, the defendant Charles E. Smith, and for specific performance of a prior executed oral agreement made by said Alma E. Smith (then Tisdell) and the complainants, to convey said premises to' Gertie Friend, one of the complainants.

The premises in litigation consist of a house, barn, and buildings with the land appurtenant thereto, situate in the village of Burr Oak in the county of St. Joseph, of the value of from $1,500 to $2,000. Mrs. Smith died after answer and before the hearing, and upon proper suggestion, the suit proceeded against Edward Hackman, the administrator of her estate. Mrs. Smith was the mother of complainant Gertie Friend, who was an only child by a former husband. Mrs. Smith had been previously married to one Irwin Tisdell, who died in May, 1911, whereupon she became the owner of the premises in question.

At that time the complainants lived upon and owned a farm in the township of Burr Oak, about one mile from the village; and immediately after the death of Mr. Tisdell his widow, then Alma E. Tisdell, went to live with them, closing her house in the village.

It is the claim of complainants that they were well and happily situated upon the farm, enjoying a pleas* ant home there with their children around them, and did not want to make any change; that when Mrs. Tisdell first came to live with them there was no defi* nite arrangement as to the terms or length of her stay with them; that very soon she became dissatisfied, and longed to go back to her home in the village, an$l requested and urged complainants to give up their farm life and move with their family to the village, and occupy her home with her, stating that if they would do so, and would support her and make and keep up certain improvements upon the place, she would forthwith, after the improvements were made, make, execute, and deliver a deed of said village property to complainant Gertie Friend, her daughter.

It is the further claim of complainants that at considerable sacrifice they finally accepted such offer, and, desiring to do all they could to make the said Alma E. Smith, then Alma E. Tisdell, happy and contented, and believing that the said Alma E. would do as she agreed, and give complainants a deed of said village premises, they found a tenant for their farm and made a lease of the same for a long time, and commenced to make the repairs and improvements requested by the said Alma E. Tisdell, and after the repairs and improvements were about finished, complainants gave up their farm at considerable pecuniary sacrifice and moved, on or about September 11, 1911, to the home of Mrs. Tisdell in the village, and have continued to so occupy said home ever since, and have made all the repairs requested by her, and to her entire satisfaction, and have done all in their power to make Mrs. Tisdell happy and contented and to give her a home with them. The improvements which complainants claim they agreed to make, and did make, consisted in papering the rooms in the dwelling house and electric lighting the same, furnishing chandeliers and fixtures, putting a cement floor in the barn, the building of a corncrib, building and repairing fence, etc., at an expense of about $200.

Matters seem to' have gone along pleasantly, the parties living together harmoniously at the village home until the last of May, 1912, when, after living with complainants about one year, Mrs. Tisdell, suddenly — at least to complainants — married the defendant Charles E. Smith. The marriage took place on May 27, 1912. Smith was a widower, an acquaintance of the family, and had been a visitor at the home of complainants. For some reason the fact of this marriage was kept from complainants for some days. The next day after the marriage, to wit, on May 28, 1912, a voluntary deed was made by Mrs. Smith to the defendant Cora Cromer, who on the same day conveyed the property in question to Mr. and Mrs. Smith as husband and wife. It was conceded upon the hearing that there was no money or property consideration for these conveyances, the purpose being to create a tenancy by the entireties in Mr. and Mrs. Smith.

Soon after the marriage became known to complainants, Mrs. Smith left the home and went with her husband, demanded possession of the premises, and, upon refusal of possession, commenced summary proceedings to recover the same, whereupon this bill of complaint was filed. The joint answer of the defendants Mr. and Mrs. Smith admits the residence of Mrs. Smith with complainants, .but claims that the same was a temporary arrangement, to be terminated at her pleasure. It denies, that any agreement to deed the premises to complainant Gertie was ever made; admits that complainants made some improvements voluntarily, as they saw fit, but alleges that such improvements did not exceed $125 in value.

The answer further claims that complainants treated the mother unkindly and cruelly, because she would not make them a present of a $1,500 mortgage which she owned.

It may be stated that Mr. Tisdell was a second husband, was not the father of complainant Gertie, and the property in question came to Mrs. Tisdell from Mr. Tisdell, and not from the father of Gertie. »

Mrs. Cromer filed a disclaimer in the case, and no evidence was offered on the part of appellant Smith relating to the alleged agreement to deed the premises to complainant Gertie Friend. The testimony was heard by the trial judge in open court, and the main testimony relating to the claimed agreement was that of the daughters of complainants, and a Mrs. Sauer, a friend of the family, who was a visitor there at the time it is claimed the agreement was made.

Mrs. Smith died December 3, 1913. At that time the relations between Mr. Smith and complainants were such that he did not notify them of her death, and they did not attend the funeral, the testimony showing that Mr. Smith had said he would not permit them to do so. Mr. Smith has married again.

The circuit judge filed an opinion in writing in which he said:

(1) “I find the terms of the alleged oral contract as claimed and pleaded by complainants to be clearly made out by the testimony of the two daughters of complainants, and by the testimony of Mrs. Sauer. SjC
(2) “I find the attendant circumstances such as to sustain the alleged oral contract, as a material one, and one likely to have been made.”
“Mrs. Friend was Mrs. Smith’s only child. Mrs. Friend’s two young woman daughters were Mrs. Smith’s only grandchildren. Mutual kindness, regard and affection had been the continued relations between the parties, unbroken until Mrs. Smith (then Mrs. Tisdell) married Mr. Smith.”
(3) “There is no evidence in the case tending to show that in any respect complainants failed in their contract duty toward Mrs. Smith in point of material provision or that they withheld from her in any degree, the full measure of consideration and affection which had characterized the relation for so many years; nor is there any evidence tending to show that Mrs. Smith ever complained of any such failure in any of these respects, or that she was in- any wise dissatisfied, until her attachment for and marriage with Mr. Smith.”
(4) “Although under the contract, complainants were bound to make Mrs. Smith a member of the family in the Burr Oak home during her life, performance by them in this respect was not made a condition precedent to the conveyance to them by her. of the premises in suit. Upon the contrary, such conveyance was due when the improvements were completed or under headway. The record clearly shows full performance by complainants in this respect. If the contract had provided for conveyance at Mrs. Smith’s death, a different question would present itself.”
(5) “If the contract had been made in the same terms but between Mrs. Smith and a stranger or one not occupying the relation of only daughter, the resulting differing, natural equities might be a subject of consideration by the court in reaching an equitable conclusion.”
(6) “Here, Mrs. Friend was Mrs. Smith’s nearest and dearest relative, her own flesh and blood, the natural object of her bounty. Mrs. Friend may scarcely be recompensed in damages for breach of contract. Her home and her husband’s business were reluctantly given up and the course of her life was materially changed by the arrangement.”
(7) “Mrs. Smith, then Mrs. Tisdell, married Mr. Smith in May, 1912. Shortly after this marriage, Mrs. Smith, who owned the property in question in fee, caused the title to be vested in herself and Mr. Smith in entirety. The value of the property is shown to be about $2,000. This conveyance in entirety appears to have been a purely voluntary one. No consideration apparently passed. Mr. Smith does not claim to be a bona, fide purchaser for value. Mrs. Smith died in December, 1913. Mr. Smith married again in about eight months after her death.”
(8) “The complainants are entitled to prevail and to the relief prayed in the bill. This finding is, in my opinion, entirely sustained by the record in the case and is, in my opinion, in entire harmony with the natural equities disclosed by the evidence.”

The defendant Charles E. Smith has appealed.

We have read the entire testimony with care, and it clearly appears that immediately after Mr. Tisdell’s death Mrs. Tisdell went to live with complainants upon their farm; that for a time she was contented and satisfied, but after she had been there a short time she desired to go back to her home, and requested and begged complainants to give up their farm life and move their family to her home in the village, and occupy said home with her, stating at that time to complainants that if they would do so, and would provide a home for her, and would make certain improvements on the place, she would, as soon as the improvements were made, or commenced, execute and deliver a deed of the premises to the complainant Gertie Friend.

The evidence is undisputed that while the improvements were being made, Mrs. Tisdell on one occasion took a box containing her papers and went out, stating that she was going to have the deed executed, that upon her return to the house she stated that she had executed such a deed to her daughter, and that everything was settled. We think the claim of complainants that here was a definite agreement, executed by the complainants, to deed the premises at a specified time, and not on some indefinite future occasion, is correct.

In McMurtrie v. Bennette, Har. Ch. (Mich.) 124, it was held that it is not a matter of course to decree specific performance of contracts. It requires a sound discretion, upon a view of all the circumstances; and this discretion must not be arbitrary and capricious, but must be regulated upon grounds that will make it judicial. Here the contract appears to be certain and definite, and has been performed by complainants.

It is urged by appellant that specific performance would be inequitable, harsh, and oppressive. We have examined the cases cited. We are of the opinion that the conclusion reached by the trial judge was supported by the evidence, and that the case is, upon the facts, taken out of the statute of frauds. That contracts of this kind have been frequently enforced by this court appears by the following cases: Twiss v. George, 33 Mich. 253; Lamb v. Hinman, 46 Mich. 112 (6 N. W. 675, 8 N. W. 709) ; Fairfield v. Barbour, 51 Mich. 57 (16 N. W. 230); Welch v. Whelpley, 62 Mich. 15 (28 N. W. 744, 4 Am. St. Rep. 810) ; Taft v. Taft, 73 Mich. 502 (41 N. W. 481); Putnam v. Tinkler, 83 Mich. 628 (47 N. W. 687) ; Russell v. Russell, 94 Mich. 122 (53 N. W. 920); In re Williams’ Estate, 106 Mich. 490-502 (64 N. W. 490) ; Briggs v. Briggs, 113 Mich. 371 (71 N. W. 632); Pike v. Pike, 121 Mich. 170 (80 N. W. 5, 80 Am. St. Rep. 488); Ruch v. Ruch, 159 Mich. 231 (124 N. W. 52) ; Brown v. Brown, 163 Mich. 337 (128 N. W. 195); Howe v. Benedict, 176 Mich. 522 (142 N. W. 768) ; Hogan v. Hogan, 187 Mich. 278 (153 N. W. 678).

The decree of the court below is affirmed, with costs of this court to complainants against appellant.

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


text:
    PERKETT v. MANISTEE & NORTHEASTERN RAILROAD CO.
    1. Carriers — Evidence—Freight.
    In an action for delay in the shipment of a carload of mixed fruit, plaintiff's evidence, tending to show merely that his witness had examined ten or twelve barrels of apples out of over three hundred, and his knowledge of their condition was limited to that inspection and the condition of the apples when they were sold six or eight weeks later, insufficiently presented or covered the issue in relation to the deterioration of the fruit when it was received, and did not justify the trial court in leaving that question to the jury.
    2. Same — Evidence—Public Inspection.
    Evidence that the peaches contained in the shipment were condemned by the health commissioner of Chicago was not improperly received, although the certificate offered referred to peaches shipped by others than plaintiff, a fair inference being that the goods shipped were included in the condemned lot.
    3. Same — Inferences—Inspection.
    As a rule, physical facts capable of direct proof should not be shown by inference, and it was therefore erroneous to receive in evidence that one who examined the cars of fruit after their arrival was of the opinion that the cars were not iced, when he could have examined the receptacles for the ice and readily ascertained the fact.
    Error to Grand Traverse; Mayne, J.
    Submitted January 12,1916.
    (Docket No. 101.)
    Decided March 31, 1916.
    Assumpsit by Louis F. Perkett against the Manistee & Northeastern Railroad Company for damages for the deterioration in value of certain fruit in transit. Judgment for plaintiff. Defendant brings error.
    Reversed.

      Wilson & Wilson (Parm C. Gilbert, of counsel), for appellant.

      John J. Tweddle, for appellee.
   Stone, C. J.

This is an action of assumpsit for damages to two cars of fruit.

Plaintiff is a produce dealer at Traverse City. On August 23, 1910, he shipped, at that place, in refrigerator cars to Frost Bros., Chicago, a car of apples, and a mixed car of apples, peaches, and plums. The cars were loaded on the tracks of the Manistee & Northeastern Railroad at Traverse City, were switched promptly to the track of the Pere Marquette, carried by the latter company to Chicago, there turned over to the Illinois Central (on whose tracks was located 'the warehouse at which the fruit was to be delivered), and by that railroad delivered to the consignees on Monday, August 29th. The bills of lading were issued by the defendant, and provided that the cars were to be re-iced by the Pere Marquette at Traverse City, Grand Rapids, and Benton Harbor. Plaintiff claims that the fruit reached Chicago more or less decayed, and brought this suit to recover the damages suffered. Two grounds of negligence were alleged, and the case was submitted to the jury on both questions: (1) That there was an unreasonable delay in moving and delivering the cars; (2) that the cars were not properly iced. It is not claimed that this defendant was in any way negligent. Plaintiff testified that defendant moved the cars promptly to the Pere Marquette, and “if there is any fault at all, it is the fault of the connecting lines, and not of the Manistee & Northeastern,” but plaintiff recovered by virtue of the Carmack amendment to the interstate .commerce act. Plaintiff recovered judgment for $520.18, and error is brought by the defendant. The principal errors relied upon may be grouped under three heads:

(1) The refusal of the court to strike out the testimony of the witness Frost as to the condition of the apples on their arrival in Chicago, and the proportion of them that was unfit for sale, and to charge the jury as requested in defendant's sixth request to charge on that subject, which was as follows:

“There is no evidence in the case as to the amount of the damage, if any, which the apples in the two cars had suffered when they were delivered to Frost Bros. The only evidence on the subject is that of the witness, Jacob Frost, who testified that he inspected only a dozen to 15 barrels out of a total of 327 barrels of apples. He also testified that the apples inspected showed deterioration, but that he could not state the extent of the decay. You are not at liberty to speculate on or guess at the amount that the apples were injured, if any, and I charge you that if you render a verdict for the plaintiff, you cannot include in it more than nominal damages, that is, six cents on account of damage to apples.”

(2) The admission of the certificates of the commissioner of health of Chicago, showing the condemnation of peaches shipped by others than the plaintiff.

(3) That the court erred in submitting to the jury the question whether the cars were properly iced.

1. One of the cars involved in this suit contained 168 barrels of apples. The other contained 159 barrels and 16 baskets of apples and some peaches and plums. The value of the apples, as stated by plaintiff in his claims filed with defendant, was $1,284, while the peaches and plums are worth $210.35. The apples constituted more than 85 per cent, in value of the two cars. The only testimony in the case as to the condition of the apples when they reached Chicago, or of the deterioration they had suffered was that of the witness Frost, who testified as follows:

“The apples were heated; they showed decay. They showed deterioration in the quality of the fruit. The extent of the decay I couldn’t state. * * * I inspected them (the apples) inside the house. Rolled some of them into the house from the car, and saw them rolled out. I inspected, I should think, a dozen to 15 barrels. * * * The barrels of apples were headed up in tight barrels and had to be opened with a hatchet. * * * They (the apples) were sold at various times during the month of September, part of them in October. * * * I sold all the apples, or at least 95 per cent. If you add 159 and 168 together you will find how many there were in the lot, and about 10 I dumped, and you will find what I sold. I do not remember what I realized for the 16 bushels of apples I sold. I have a memorandum of everything I do. * * * That is what I base my knowledge on, what the amount of the sales was. * * *
“Q. Can you state approximately what proportion of this fruit, taken altogether, apples, plums, and peaches, were unfit for sale?”

Objection by defendant, because question was not sufficiently definite. This objection was overruled and an exception taken by the defendant. The witness answered :

“The peaches were 95 per cent, total loss. The plums I should say 25 per cent., and apples at least 35 per cent, damaged by delay in transit.”

At this point the motion was made to strike out the testimony as to the apples because they were not sold until September and October, having reached Chicago on August 29th. It seems to us, from an examination of all the testimony of this witness, that he based his knowledge of the condition of the apples upon the examination of 12 or 15 barrels as they were rolled out of the car, and his knowledge of the sales made. in September and October. We think this testimony was too vague and indefinite to warrant the submission of the extent and amount of damages suffered, and of the extent of the deterioration when they were delivered to the consignee, and that the court erred in refusing to give defendant’s sixth request, above quoted. Not only did the court refuse this, but it also permitted Frost to testify that, based on the sales of the apples he made during the months of September and October, at least 35 per cent, of the apples were “damaged by delay in transit.” When it is remembered that the question involved was the condition of these apples when they arrived in Chicago, and not when they were sold 30 or 60 days afterwards, it seems to us that the error of the court is made very clear.

2. We are not able to say from the testimony that the court erred in the admission of the certificates of the commissioner of health of Chicago, showing the condemnation of the peaches shipped, as is claimed, by others than the plaintiff. We think it can be gathered from the record that all of the peaches covered by the certificates were embraced in the shipment, some of the persons named therein being those who delivered the peaches to the plaintiff at Traverse City. We do not think this point well taken.

3. Did the court err in submitting to the jury the question whether the cars were properly iced? This question is raised by an assignment of error. Upon this subject the plaintiff relied upon the testimony of the witness Frost, who testified:

“I didn’t examine the condition of the ice bunkers. I couldn’t tell from being in the car. and the condition of the car whether there was any ice in the bunkers. I have had occasion during my business career to become familiar with refrigeration of cars of fruit. Before the occasion in question I had, many times, been in cars in which fruit was shipped. It is a frequent occurrence in our business.
“Q. I will ask you, from what you observed upon entering that car and your presence in it, to say whether or not the car was iced, whether the bunkers had ice in them?”

This question was objected to by defendant’s counsel because it called for a conclusion of the witness whether the car had of had not been iced, and that it was a simple fact to determine by examination of the ice. bunkers, and did not require any previous skill, and that it called for a conclusion of the witness as to an ultimate fact, which the court and jury must determine. This objection was overruled and an exception taken. The witness answered:

“I could. There couldn’t have been any ice in the bunkers. No employee of our firm helped to unload the cars.
“Q. State your reason for saying, from your observation of the car, that there was no ice in the bunkers; that the car was not iced.”

This was. objected to upon the same grounds as the prior objection. Objection was overruled, exception noted, and the witness answered:

“By going into the cars you can feel the cold air strike your lower limbs if there is any ice in it, if there is 500 pounds in it. I go into 5 to 20 cars, over 20 every day, every morning, sometimes as high as 50, right on the Illinois Central tracks.”

Later the witness testified that it would have been easy for him to have looked into the bunkers, but that he did not do so.

It is urged by defendant’s counsel, and we think correctly, that it is not proper to prove a physical fact indirectly and by inference when it is susceptible of direct proof, referring to 17 Cyc. p. 209, and cases cited. The fact seems to have been submitted to . the jury whether the cars were iced in accordance with the directions in the bills of lading. Manifestly it cannot be said from this evidence that the cars were not iced as provided in the contract. The burden was on plaintiff to show that fact. There was no evidence that if the cars had been iced as specified in the bills of lading, this would have been sufficient to have brought the fruit to Chicago in good condition. We think the evidence was not sufficient to sustain the allegation that the cars were not properly iced, or to carry that question to the jury.

For the errors pointed out, the judgment below is reversed, and a new trial granted.

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


author: Ostrander, J.

text:
    PAUL v. COLLINS.
    1. Patents — Jurisdiction—Infringement—Contracts — Trespass on the Case.
    Where- plaintiff was the inventor of a curtain holder for automobiles, the nature of which he disclosed to the defendants, who conspired with others to procure a patent for the invention, in advance of plaintiff, who also claimed to have entered into an oral contract with defendant corporation to license the manufacture and sale of the device, for a royalty, he could not recover in an action on the case in the State court, as the vital issue was the identity of the inventor, and if plaintiff’s claim was sustained the patent must be held invalid.
    2. Same — Collateral Sale.
    Though in cases involving collaterally the validity of a patent the State court may enter into the question, as, for example, the defense to a note that it was given for a void patent, and hence was without consideration, yet if the real issue between the litigants is the question, Who was in fact the inventor? the State courts are deprived of jurisdiction.
    3. Same — Evidence.
    A patent is everywhere prima facie evidence that the grantee was the inventor of the patented device with exclusive rights to make, sell and use it.
    4. Same — Invention—Basis.
    And it is essential to the validity of a patent that it be granted on the application, supported by the oath, of the original first inventor.
    Error to Wayne; Mayne, J., presiding.
    Submitted January 5, 1916.
    (Docket No. 29.)
    Decided March 31, 1916.
    Case by William A. Paul against Jeffery N. Collins and others for fraud and conspiracy. Judgment for plaintiff. Defendants bring error.
    Reversed.

      Thomas W. Payne (Alexis C. Angelí, of counsel), for appellants.

      Arthur E. Fixel and Max H. Finkelston (James O. Mur fin, of counsel), for appellee.
   Ostrander, J.

The defendant Novelty Leather Works is a Michigan corporation. Defendants Collins and Bennett are two of the three directors of said corporation, and, respectively, president and treasurer thereof.

The case made by the declaration and by plaintiff’s proofs is that, having himself invented something supposed to be patentable, and which the commissioner of patents later determined was patentable, having confidentially explained and exhibited the invention to defendant Collins, and having made an oral agreement with the defendant Novelty Leather Works, through defendant Collins, by the terms of which it was to bear the expenses of procuring a patent ior the invention, to be granted to plaintiff, to handle the patentable device and patent rights and pay plaintiff 25 per cent, of the receipts on all business done on said device by the Novelty Leather Works, “in consideration of plaintiff allowing the Novelty Leather Works to manufacture and sell said device and to secure contracts for licensing the use of said device,” which agreement Collins promised to have reduced to writing, but did not, the defendants conspired together, entered into a scheme, and contrived to deprive plaintiff of the fruits of his said invention and agreement, by causing a patent for said invention unlawfully to be applied for by, and to be granted to, defendant Collins as inventor, denying before and after the granting of the patent, but. after the said agreement had been entered into, that plaintiff was inventor or had any interest in said invention. Considerable sums of money have been and will be received by defendants, or some of them, on account of sales and licenses to use said invention, and plaintiff is denied any interest therein. Seeking a remedy, plaintiff brought this action, not in assumpsit for the portion of the moneys accruing to him under the terms of his said agreement, but an action on'the case; his claim for damages being broad enough to cover any and all damages growing out of the alleged wrong. He alleges the duty of defendants—

“in view of their relations with each other and in view of each of their agreements and relations with plaintiff in their dealings with said invention, to apply in plaintiff’s name for a patent on plaintiff’s said invention, to take up the sale of said device and license for the use of same, and to pay plaintiff 25 .per cent, of the receipts on such sale of any and all licenses, and on sale of any and all of said devices.”

Negativing the performance of these duties, he alleges as a result that the 25 per cent, of the business transacted has been lost to him, plaintiff has been deprived of the legal title of said invention, and will be put to great loss and expense in the assertion of his rights to said invention and the profitable transaction of business on said device, and will sustain in the future great loss and damage.

“The case at bar (I quote from the brief for the. plaintiff) was a suit for conspiracy based on the damage for breach of contract. It called for a remedy to cover loss of profits. It was not in affirmance of the contract. His [plaintiff’s] suit has as a basis an agreement of defendants to pay him for the use of his invention. This is a matter of cognizance under the common law.”

And quoting from his reply brief:

“The measure of the damage resulting from the conspiracy must be, not the value of the patent (which matter was never submitted to the jury), but the value of the contract given plaintiff. This was the rule of damages given by the court.”

It is not alleged in the declaration, but was proved at the trial, that plaintiff was informed before a patent was granted that Collins had applied for one, and, after the patent had been granted to defendant Collins, plaintiff intervened in the patent office for the purpose of having himself declared to be the original inventor. The precise extent to which his contention was pressed does not appear, beyond this, that he took no appeal from the ruling of the commissioner of patents, and, it is inferred, made no considerable contest before the commissioner. It is also inferable that want of necessary funds was one reason for not further contesting. The determination was adverse to him. He did not appeal from or seek to review or under the Federal law to set aside the determination.

Plaintiff had judgment against all of the defendants; the damages recoverable being confined to the portion of the moneys received and likely to be received by defendants on account of the said device and invention secured to plaintiff by the terms of his alleged agreement. This judgment the defendants, appellants, ask to have set aside for the reason principally that the court was without jurisdiction to adjudicate the controversy:

“(a) Because the matter at the bottom of the controversy, Viz., the validity of the Collins patent, had been decided against the plaintiff in the United States patent office.
“(b) Because the case is one essentially arising under the laws of the United States.
“(2) The charge of the court as to the validity of the Collins patent was self-contradictory.
“(3) In any event the court erred in his instructions as to damages, and allowed, on the theory adopted by the jury under the charge, excessive damages for royalties received under a void patent, and, further, in an action for fraud, laid down a rule of damages applicable only to an action for breach of contract.
“ (4) The court erred in various rulings on the admissibility of evidence which was purely hearsay.
“(5) The court omitted to give various requests to charge under the general theory adopted by him which appellants were entitled to have given.
“ (6) The court gave various instructions in his general charge which were erroneous and prejudicial to the defendants and appellants.”

Patent rights come from the United States, and the Federal statutes provide the ‘ method, and the only method, of obtaining a patent. Prior invention and prior rights to a patent applied for by any person are in the first instance determinable in the patent office. An appeal lies from the decision of the commissioner of patents, and, finally, the Federal courts have jurisdiction, upon a bill in equity filed for that purpose, to determine whether a patent should have beeh granted to one rather than another claiming to be the original inventor. And the court may by its decree cancel a patent which has been granted and order the patent to be granted to another. By the Constitution of the United States exclusive jurisdiction is given to the circuit courts of the United States of all suits at law or in equity arising under the patent or copyright laws. All questions which concern the infringement or validity of, and title to, patents granted under the patent laws must be litigated in the circuit courts of the United States.

But it is settled:

“That where a suit is brought on a contract, of which a patent is the subject-matter, either to enforce such contract or to annul it, the case arises on the contract or out of the contract, and not under the patent laws.”

A considerable review of the Federal decisions supporting this proposition will be found in Atherton Ma chine Co. v. Atwood-Morrison Co., 102 Fed. 949 (43 C. C. A. 72), and in Pratt v. Gaslight & Coke Co., 168 U. S. 255 (18 Sup. Ct. 62), reference is made to many decisions of Federal and State courts which are to the same effect. In the case' last mentioned it is said that the principle is well established that any defense which goes to the validity of a patent is available in the State courts, as that the patent is void because the invention was well known before, or because it is useless or immoral, or because it is an infringement upon other prior patents, and it is no objection to the jurisdiction of the State court that the question of validity may involve the examination of conflicting patents or the testimony of experts. The cases referred to, however, and those to which the principle applies, are cases in which the suit was to recover agreed upon royalties, or licenses, or where a subsisting contract was shown governing the rights of the parties in the use of an invention. For example, in a suit upon a note given for a patent right it may be shown that consideration wholly^ failed because the patent is void.

The law is well stated by Judge Sharswood in Henry T. Slemmer’s Appeal, 58 Pa. 155, 163, 164 (98 Am. Dec. 255), as follows:

“But, though patent rights are peculiarly within the jurisdiction of the courts of the United States, yet it is undoubtedly true that, when they come in question collaterally, their validity may become a subject of inquiry in the State courts. Thus in a suit upon a promissory note, if it is set up as a defense that the consideration was the sale of a patent right, and that the patent is void, so that there was in fact no consideration, the State courts constantly exercise jurisdiction. Bliss v. Negus, 8 Mass. 46; Cross v. Huntly, 13 Wend. [N. Y.] 385; Rich v. Atwater, 16 Conn. 414; Burr v. Gregory, 2 Paine (C. C.), 429 [Fed. Cas. No. 2,191] ; Rheem, v. Holliday, 4 Harris [16 Pa.], 347. The jurisdiction is not defeated because the subject-matter of the action concerns the use of a patent right, so long as the question of the validity of the patent is not necessarily involved, but arises only incidentally and by way of defense: Sherman v. Transportation Co., 31 Vt. 162; Tomlinson v. Ballet, Law’s Dig. 229. Accordingly the courts of the United States refuse to take cognizance of cases between citizens of the State where they involve, not the infringement of the patent, but controversies growing out of contracts of which it is merely the subject-matter: Goodyear v. Day, 1 Blatchf. 565 [Fed. Cas. No. 5,568]; Burr v. Gregory, 2 Paine, 436 [Fed. Cas. No. 2,191] ; Brooks v. Stotley, 3 McLean, 523 [Fed. Cas. No. 1,962]. The result of the authorities, then, appears to be that the State courts are competent, either at law or in equity, to enforce a contract or a trust, of which a patent right is the subject-matter, where the validity of the patent is not directly in question, and even to pass on that when it arises ex necessitate, as by way of defense in an action on a contract.”

See, also, Excelsior Wooden Pipe Co. v. Bridge Co., 185 U. S. 282 (22 Sup. Ct. 681).

A patent is everywhere prima facie evidence that the grantee was the inventor of the patented device, with the exclusive right to make, sell, and use it. Smith v. Vulcanite Co., 93 U. S. 486; Lehnbeuter v. Holthaus, 105 U. S. 94; Morgan v. Daniels, 153 U. S. 120 (14 Sup. Ct. 772); Kennedy v. Hazelton, 128 U. S. 667, 672 (9 Sup. Ct. 202). In Margan v. Daniels the complainant filed his bill in equity under the provisions of section 4915 of the Revised Statutes of the United States (U. S. Comp. St. 1913, § 9460), charging that he was the original, sole, and first inventor of. a patentable device, filed his application for a patent therefor, and was met by an interference application filed by defendant, to whom, after a hearing, a patent was granted. He prayed that he might be declared to be the original inventor and have a patent issued to him. It is pointed out in the opinion that the case was not one of an appeal from the decision of the commissioner of patents, but an application to set aside the action of one of the executive departments of the government. And it was said, with respect to the burden which in such cases the complainant must carry, that upon principle and authority it must be laid down as a rule that, where the question decided in the patent office is one between contesting parties as to priority of invention, the decision there made must be accepted as controlling upon the question of fact in any subsequent suit between the same parties, unless the contrary is established by testimony which in character and amount carries thorough conviction.

It is essential to the validity of a patent that it be granted on the application, supported by the oath, of the original and first inventor. Kennedy v. Hazelton, supra.

Let us now examine more particularly the case presented by the plaintiff. It is not an action brought to enforce a contract, nor one growing out of a contract. I am assuming for the purposes of this case that A. might agree to pay B. a portion or percentage of whatever he (A.) received for the use of B.’s idea, design, or device, whether it was or was not patentable, and the contract would be enforceable. Only one of the defendants is alleged to be, or to have been, a party to any contract. Two of the defendants are strangers to the alleged contract. The making of a contract is alleged and the nonperformance of it. Loss of that which performance of the contract would have brought to plaintiff is at least inferentially alleged, and is a part of the damages sought to be recovered. Defendants are not liable to plaintiff in this action for breach of contract, nor can their liability be measured by the terms of the alleged contract. It is an action for damages based upon a wrong committed by all of the defendants. What is alleged is that by their fraudulent conduct defendants have robbed plaintiff of the thing upon which the alleged contract was based, the thing which represented the consideration for the agreement of the Novelty Leather Works. The patent, until it is held to be void, is an answer to every essential allegation upon which plaintiff’s rights are» made to depend. The patentee’s rights are directly assailed, and plaintiff’s right to maintain the suit made to depend upon a determination that the patent is void. If it is valid, the wrong has not been committed, nor the injuries sustained. It is not void, and is not claimed to be void, because of any contractual relations of the parties, but because plaintiff, and not Collins, is the original and first inventor. The vital question submitted to the jury was: Who was the first, the original, inventor, Collins or the plaintiff?

It appears therefore that, as affecting the question of jurisdiction, the allegations respecting the contract are unimportant. The material allegations are that plaintiff is original and first inventor of a patentable thing, defendants, or some of them, were in confidence informed about it, and they conspired together to secure a patent for the device to be granted to Collins, thus fraudulently securing for themselves the profits, emoluments, and benefits which of right belong to plaintiff. If the State court has jurisdiction in this case, then it has jurisdiction in any action to recover damages by one who, claiming to be original and first inventor, alleges that he has been robbed of his invention by another to whom he confided it, who has secured a patent therefor. An action for damages for such a wrong would perhaps be maintainable in the State court after the plaintiff’s alleged rights as inventor had been determined by a court having jurisdiction to determine them, but in no such case could it be said that the question of patent rights was incidental merely to the right to recover the damages alleged.

In my opinion, the circuit court for the county of Wayne should have dismissed the case for want of jurisdiction, and it follows that the judgment was erroneous and should be reversed.

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