author: Hooker, J.

text:
    WEAVER v. MURRAY.

      1. Evidence — Materiality—Conspiracy.
    In an action for a sum due under a contract, which defendant admitted, but claimed had been compromised by the making of a subsequent agreement in place thereof, evidence of other litigation of the defendant, and garnishment proceedings in this action affecting the other cases, was properly excluded as immaterial, although offered to show that the motive of plaintiff was fraudulent.
    2. Trial — Conduct on Court.
    It was not improper conduct of the trial court, upon cross-examination of a witness, after, an objection made by counsel, and, on referring back to a previous question and answer, to say, “Of course, he denied it,” when it is apparent that the court merely asked for information and referred to the effect of the question and answer.
    3. Contracts — Instructions to Jury — Trial—Compromise and Settlement.
    It was not erroneous to charge the jury that the compromise which defendant claimed was made, of plaintiff’s admitted claim, must be shown by a preponderance of the evidence, and that the mere fact that defendant did work which was of vahjfí, could not be considered as canceling the indebtedness of defendant to plaintiff, unless it was done in pursuance of the alleged compromise.
    Error to the superior court of Grand Rapids; Stuart, J.
    Submitted October 26,1910.
    (Docket No. 113.)
    Decided December 22, 1910.
    Assumpsit by Milton S. Weaver against A. Linn Murray upon a contract to pay plaintiff a specified amount. A judgment for plaintiff is reviewed by defendant on writ of error.
    Affirmed.

      Maher & Barnard, for appellant.

      Richard C. Qoodspeed, for appellee.
   Hooker, J.

The plaintiff brought an action of assumpsit against the defendant and recovered. Defendant has appealed.

So far as the pleadings show, the action was based upon a settlement and written agreement between them, and a promise by defendant to pay plaintiff 1190.43. The defendant pleaded the general issue and a later agreement that the amount should be considered paid, if defendant should succeed in buying up certain notes of the company, together with certain stock held by the payees, at 50 cents on the dollar, said stock to be divided equally between plaintiff, defendant, and one Goodspeed. There was no dispute upon the trial as to indebtedness of $190.43. There was conflicting testimony as to the making and performance of the alleged agreement claimed by the defendant as a payment, and the judge told the jury in his charge that if that agreement was made, the verdict should be for the defendant, and if not shown by a preponderance of the proof, the verdict must be for the plaintiff. The charge was a helpful one, presenting in a clear-cut way the vital points, and not embarrassing or befogging the jury by an unnecessary discussion of the evidence or immaterial testimony.

Motion for New Trial. The court did not err in denying the motion for new trial. We think the verdict has not been shown to be against the weight of evidence, nor do we find evidence of any prejudice in the minds of the jury.

Evidence of Malice. Counsel offered in evidence certain proceedings in three other cases and a garnishee proceeding in this case. We do not readily find them in the record, except the garnishee proceedings, and counsel has made no reference to the pages where they are to be found. In his brief he says that they were offered to show that this suit was being prosecuted fraudulently, maliciously, and without cause, and claimed a conspiracy existed to defraud and embarrass defendant in collecting claims due him from the company. In offering it counsel said:

The Court: I don’t think I would want to go into anything except as to' whether that stock was given in payment of this settlement.
“Mr. Maher: We have the right to show what the purposes of this suit are, that they were fraudulent and as tending to corroborate the claims that it is so, that the settlement was made, and that notwithstanding the settlement this suit was brought. We propose to show a series of acts on the part of this man and his associates all of which have been for the purpose of defrauding Mr. Murray and preventing him from collecting what was owing to him by the Inner Shoe Tire Company. We do not propose to go into any cases that have not been tried; we propose to go into only the undisposed of matters.”

We do not set forth the colloquy at length. It seems to us as obvious as it did to the trial judge that these matters were foreign to the issue, which was a narrow one, and that it was proper to exclude this testimony.

Remark of Court. Plaintiff had testified that although he received his share of the stock purchased at 50 cents on the dollar, he had at once given it to James Fox at the suggestion of Goodspeed. The natural inference was that he did not care to take it. Counsel says that this testimony was well calculated to prejudice the jury and the following occurred on the cross-examination of defendant:

“Q. (Mr. Goodspeed to Mr. Murray). You don’t remember that Mr. Weaver said that he didn’t want that stock; that he hadn’t done anything for it ?
“A. No, sir; he did not say it?
“Q. And he wanted to give it to Mr. Goodspeed because Mr. Goodspeed had put the idea through?
“A. Never said anything of that kind in my presence.
“Q. Were you tliere when this took place?
“A. I was there when my stock was handed to me. I presume Mr. Weaver got his at the same time; it was written off.
“ Q. You say something of that kind was said ?
“A. There certainly was not in my presence.
“Q. Were you there when Mr. Goodspeed said if he wanted to give it to somebody to give it to James Fox?
“A. No, sir.
“Q. You were not there then ?
“A. No, sir.
“Mr. Maher: I object to that question as assuming that Goodspeed said it, and ask that the question and answer be stricken out.
“Mr. Goodspeed: We may show this was said.
“The Court: What is the question? (Last question and answer read.)
“ The Court: Of course, he denied it.
Mr. Goodspeed: He states he didn’t hear any such thing; I think that covers it.
“ The Court: It may stand.
“Mr. Maher: An exception.”

It is apparent that the court was asking information as to the question and answer objected to, and not making a statement that, “Of course, he denied it.” There was no error in this.

Charge. The court said:

Now the transaction that took place in regard to this stock as I have said, if it took place, as the defendant claims and has testified in regard to, if you are satisfied of that by a preponderance of the evidence, that would be a defense. But the mere fact that the defendant Murray did work in connection with buying up this stock, bringing it in so it could be divided, X say that mere fact alone would not and could not be considered by you as wiping out this indebtedness between him and Weaver, the plaintiff ; the mere fact that he did work that was valuable and that enabled the plaintiff to obtain this stock; that mere fact alone of his getting something valuable could not be considered as an offset or cancellation of this indebtedness without this agreement that the defendant claims Weaver made in regard to it. And the mere fact that Mr. Weaver received a thousand dollars’ worth of stock, or any amount of stock, by this agreement of Mr. Goodspeed’s, could not be considered as an offset to this claim, unless, as I have said, he agreed to receive it in the way that Mr. Murray has stated. In other words, this money as it appears by this agreement was to be furnished by Goodspeed and Goodspeed was distributing this stock. If it was a present from Goodspeed, it was a present from Goodspeed to each of these men who were running the business and trying to put it upon its feet. He could have kept all this, I suppose; he could have bought up these notes and could have kept it all, but he made the agreement to divide up with the other two in the company, so that that was a. gratuity, so to speak, on the part of Goodspeed. But if, in connection with that, Mr. Murray, by reason of Weaver’s not going out and helping him, got him to say that he would release him from the indebtedness if he brought that about and take that stock, then I say, if that is made out by a preponderance of the evidence, that would be a defense, but the mere fact alone that he got something valuable for nothing from Goodspeed would not of itself cancel the indebtedness.”

We see nothing here justifying a reversal.

The judgment is affirmed.

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


source: Caselaw Access Project

license: Public Domain

text:
    BAARS v. TOWNSHIP OF LAKETON.
    1. Principal and Agent — Public Officers — Interest of Agent.
    An agent cannot bind his principal in a contract which the agent makes with himself; and the doctrine extends to public officers.
    2. Public Officers — Townships—Highway Commissioner.
    A highway commissioner cannot recover for services rendered in overseeing the work of his own man and team upon the highway; a contract with himself for such work being unlawful.
    3. Costs — Consent to Judgment — Statutes.
    A defendant who files a consent to a judgment (3 Comp. Laws, § 10084), for the amount plaintiff is entitled to recover, should be awarded all costs made thereafter.
    Error to Muskegon; Sessions, J.
    Submitted October 20,1910.
    (Docket No. 95.)
    Decided December 22, 1910.
    Assumpsit by John Baars against the township of Laketon, for services rendered. Judgment for plaintiff and defendant brings error.
    Reversed, and judgment for a reduced amount entered.

      Alex. Sutherland, for appellant.
    Gross, Vanderwerp, Foote & Boss, for appellee.
   Hooker, J.

The defendant has appealed from a judgment of $88.15 in favor of the plaintiff; the same having been rendered in circuit court upon a verdict for that amount. Only $13.15 is involved; defendant having offered in writing, under 3 Comp. Laws, § 10084, to allow judgment for $75. The plaintiff is a highway commissioner, and filed a claim for services with the township board. They allowed him compensation at $2 a day, the minimum amount provided by statute, and for a less number of days than he claimed to have worked. The amount allowed was $75. He refused to accept this amount, and brought this action. The defendant has appealed.

The contested item appears to be time spent in overseeing the work of his own team and driver only in work upon the highway. It is the contention of defendant’s counsel that he is not entitled to pay for such service. The learned circuit judge instructed the jury that he might recover for such service, and left it to the jury to say how much of the time charged it was reasonably necessary to spend. The only question requiring consideration is whether he could lawfully charge for overseeing the work of his own man and team, when no one else was at work. The highway commissioner determined to do certain grading by the day, and teams were employed by him — among others, his own. On some of the days only his own team worked.

The defendant claims that the court erred in submitting these items to the jury, and in declining to decide them himself. It is a well-settled rule that an agent cannot bind his principal in a contract which the agent makes with himself, and we have decided that the doctrine extends to public officers. This was decided in the case of People, ex rel. Plugger, v. Township Board, 11 Mich. 222. The following cases are in point on the general proposition: Beaubien v. Poupard, Har. Ch. (Mich.) 206; Walten v. Torrey, Har. Ch. (Mich.) 259; Clute v. Barron, 2 Mich. 192; Dwight v. Blackmar, 2 Mich. 330 (57 Am. Dec. 130); Moore v. Mandlebaum, 8 Mich. 433; Flint, etc., R. Co. v. Dewey, 14 Mich. 486, 487; Hannah v. Fife, 27 Mich. 172; Powell v. Conant, 33 Mich. 396; Prince v. Clark, 81 Mich. 170 (45 N. W. 663); Wilbur v. Stoepel, 82 Mich. 344 (46 N. W. 724, 21 Am. St. Rep. 568); McNutt v. Dix, 83 Mich. 328 (47 N. W. 212, 10 L. R. A. 660); Miner v. Ice Co., 93 Mich. 109 (53 N. W. 218, 17 L. R. A. 412); Humphrey v. Transportation Co., 107 Mich. 167 (65 N. W. 13). We are constrained to hold that the plaintiff set his own man and team at work unlawfully; and, this being the only occasion for his supervision, we are of the opinion that he is not entitled to compensation for time spent in supervision, and the court should have so instructed the jury. The question seems to us to be within the spirit, if not the letter, of the rule.

As the record shows that the defendant can contest only the excess of the judgment over $75, that amount — i. e., $75 —having been allowed and tendered, and no question being raised in the appeal as to that sum, we may enter a judgment for plaintiff in this court for $75, with interest from the time the action was begun, and with costs made before the offer of judgment.

The defendant is entitled to a judgment here for all costs made since the filing of its written offer of judgment.

Moore, McAlvay, Brooke, and Blair, JJ., concurred.


author: Ostrander, J.

text:
    STUBMAN v. MODRACK.
    1. Deeds — Delivery—Sufficiency of Execution.
    Where a decedent executed deeds several years before her death, telling the attorney who prepared them that when she died everything would be all right, and kept them in a safe in which she deposited her will, afterwards executed, and where she told her son to have the deeds recorded after her death, but kept control of them herself, in the safe, no sufficient delivery was shown, although the son placed the instruments on record after her decease.

      3. Witnesses — Evidence—Statutes—Matters Equally Within Knowledge of Deceased.
    Testimony of the son who caused the deeds to be recorded, that deceased directed him to have them placed on record after her death, was competent as to deeds not running to him as grantee or in which he had no interest except as the agent of deceased.
    Appeal from Ottawa; Padgham, J.
    Submitted October 26, 1910.
    ( Docket No. 120.)
    Decided December 22, 1910.
    Bill by Louis Stubman by John Vyn, his next friend, against John Modrack, Mary Modrack, Louis Fischback, and Louis Fischback and William Thieleman, executors of the estate of Ulrika Luhm, deceased, to set aside certain deeds. From a decree dismissing the bill, complainant appeals.
    Reversed.

      Corrie C. Coburn and Smedley, Hall & Freeland, for complainant.

      Walter I. Lillie and Gfeorge A. Farr, for defendants.
   Ostrander, J.

Ulrika Luhm died August 10, 1908, testate, her last will was probated, and administration of her estate was entered upon. In March, 1892, she executed a deed of real estate. In January, 1902, she executed five deeds of real estate. They are all short-form warranty deeds. After her death and on August 28, 1908, her son, Louis Fischback, caused the deeds to be recorded. Louis Stubman is grantee in two of the deeds, and in the others Louis Fischback, John Modrack, and Mary Mod-rack, respectively, are the grantees. They are all children or grandchildren of decedent. Complainant seeks a decree setting aside three of the deeds — not those running to himself — his claim being that decedent never delivered them. Whether they were delivered is the question presented, and, with it, the question whether it was competent for Louis Fischback to testify to decedent’s directions concerning the deeds. At the circuit a decree was entered dismissing the bill.

The history of these deeds is as follows: They were all of them drawn by the attorney for decedent, who also signed them as a witness and executed the notary’s certificates. The other witness was the son of the scrivener, himself a lawyer. All of the deeds dated in 1902 were ordered at one time, four of them being dated January 30th, and one January 31st. When they were finished, decedent said, “When I go dead, then everything is all right,” or, “Everything is all fixed.” They were kept by decedent in a safe in which her will," executed the next month, was also kept. They were found in the safe after her death. Before her death she told her son, Louis Fischback, who worked for, or with, her in her saloon, and who with her ran across them one day in looking for some other paper in .the safe:

“Put them back in there. If I should die or something should happen, why you take care of them and have them recorded.”

Decedent told others that, in substance, she had disposed of her property. Louis Fischback first took the deeds to the probate judge and later, as has been stated, caused them to be recorded. We have not found a copy of decedent’s will in the record. It seems to be agreed that in terms it disposes of all of decedent’s property to Louis Fischback and Louis Stubman, in equal shares.

Assuming that Louis Fischback was, as to the deeds not running to himself, the mere agent or trustee of decedent to execute her purpose, it is not clear that his testimony of the directions given him by decedent should be excluded. See Jenkinson v. Brooks, 119 Mich. 108, 111 (77 N. W. 640). We do not decide the question because we are satisfied that his testimony does not alone, or in connection with all other circumstances disclosed, prove a delivery of the deeds by the decedent. Certainly they were not delivered to Louis Fischback. They were never beyond the control of the grantor. It does not appear that the grantees, other than Fischback, knew of the existence of the deeds.

We feel obliged to reverse the decree of the circuit court and to enter here a decree for complainant, with costs of both courts.

Bird, C. J., and Hooker, Moore, and Stone, JJ., concurred.


author: Brooke, J.

text:
    LARKIN v. MODERN WOODMEN OF AMERICA.
    1. Insurance — Fraternal Beneficiary Associations — Exhaustion of Remedies within the Organization.
    A clause in a fraternal benefit insurance policy, providing that no action shall be maintained on the certificate until after. the proofs of death have been filed and passed upon by the board of directors, is a valid limitation, and is a condition precedent to the right of action.
    2. Same — Officers—Principal and Agent — Authority.
    Under the by-laws of a fraternal beneficiary society, prohibiting any officer or local camp official from waiving the provisions of a policy of insurance, and declaring that the clerk of a local camp is not the agent of the head camp, the clerk of a local camp could not waive the by-laws of the great camp, relating to the exhaustion of remedies within the order.
    3. Same — Waiver.
    It did not amount to a waiver of the condition precedent, that the clerk of a local camp told the plaintiff if she would pay a part of the amount received to her daughter-in-law, the claim would be allowed, when it appeared that she rejected the proposition and lost nothing in reliance on it.

      4. Same — Delay in Determination — Reasonable Time — ByLaws.
    The board of directors may not arbitrarily and indefinitely postpone action on a claim, and thereby defeat the beneficiary’s right of action, although the by-laws fix no time within which they shall act.
    5. Same-Reasonable Time.
    Nine months is not an unreasonable time for the board of directors to take in passing on a claim which they had-caused to be investigated and found reason to believe was invalid for breach of a condition in the insurance policy against the excessive use of intoxicating liquors.
    Error to Washtenaw; Kinne, J.
    Submitted June 29, 1910.
    (Docket No. 111.)
    Decided September 28, 1910.
    Rehearing denied February 1, 1911.
    Assumpsit by Margaret Larkin against the Modern Woodmen of America on a policy of insurance. A judgment for plaintiff is reviewed by defendant on writ of error.
    Reversed, and no new trial ordered.

      Truman Plantz and Smith, Baldwin & Alexander, for appellant.

      A. J. Sawyer & Son, for appellee.
   Brooke, J.

Plaintiff is the beneficiary in an insurance policy issued to her son by the defendant, a fraternal organization. The insured came to his death by falling from the rear platform of an interurban car, on September 19, 1908. He had been a member of the defendant society for about nine years. The issues raised by defendant’s plea were:

(1) That the suit was prematurely launched.
(2) That the insured had misrepresented material facts in his application, with reference to his use of alcoholic beverages.
(8) That the policy of insurance had been rendered void by the act of the insured in becoming intemperate in the use of intoxicating liquors.
(4) That the insured came to his death, either directly or indirectly, because of the intemperate use of intoxicating liquors.

Testimony was introduced on behalf of the defendant tending to establish each of these claims. With reference to the first: It appears that the insured died on September 19, 1908, and that proofs of death were duly forwarded to defendant. They were referred to Mr. C. J. Byrns of Ishpeming, Mich., for investigation, in October, 1908. Mr. Byrns made an investigation as to the habits of the insured, which resulted in disclosing facts which defendant relies upon to defeat the policy, upon the merits of the case. On February 27, 1909, Byrns wrote to plaintiff’s counsel as follows:

“Am advised suit has been brought by the widow of our deceased neighbor (the insured) against the saloon keeper who sold him liquor the day of his death, which accounts for the delay in payment beyond the March meeting of the board.”

On June 23, 1909, Byrns.wrote as follows:

“ I thank you very much for the information conveyed, relative to the nonsuit (the widow’s suit against the saloon keeper). The next meeting of our board of directors will convene at Rock Island, 111., on the 14th of July, when a concluding decision will be reached in connection with this claim.

Six days later, on June 29, 1909, plaintiff commenced her suit.

The certificate sued upon contained the following provision :

“ (6) No "action can or shall be maintained on this certificate until after the proofs of death and claimant’s right to benefits, as provided for in the by-laws of this society, have been filed with the head clerk and passed upon by the board of directors, nor unless brought within one year after the date of such action by said board.”

Section 45 of the by-laws contained the same provision.

We have recently held that a clause similar in all essentials to the above is binding upon the parties, and that no action can be instituted until the remedies within the order are exhausted. Conley v. Supreme Court, I. O. F., 158 Mich. 190 (122 N. W. 567), and cases there cited. It was claimed by plaintiff that this provision of the bylaws had been waived by the defendant. A motion having been made by the defendant for a directed verdict, upon the ground that the suit was prematurely brought, the court said:

“My idea about the matter is that the only question for the jury to determine is whether or not he had become intemperate in the use of intoxicating drinks. If they find he had, I don’t think she can recover. I don’t think there is any evidence of a waiver. At present I will deny the motion, and you may go to the jury.”

Upon this point the court charged the jury as follows:

“It is claimed by the defendant in this suit that the plaintiff could not maintain this suit until her remedy provided by the by-laws had been exhausted; that is, until it had been passed upon by the board of directors. If the jury shall find from the evidence in this case that a time was fixed for the hearing of plaintiff’s claim before the board of directors and no action was taken, and that a second time was fixed for the hearing of said claim and no action was taken, and that in the interim the beneficiary, the plaintiff in this case, was informed by the defendant’s agents that if she would pay a part of the loss to the daughter-in-law the claim would be allowed, and it was intimated to her that the claim would be allowed, then the jury have a right to find that the defendant had waived the right to. defeat the plaintiff’s recovery on the ■ground that suit had been prematurely brought.”

The defendant’s agent, referred to in the quotation, one Taylor, was clerk of the local camp at Adrian. Section 40 of the by-laws provides:

“No officer of this society except as provided in section 107 hereof, nor any local camp officer, is authorized or permitted to wáive any of the provisions of the by-laws of -this society which relate to the contract between the member and the society, whether the same be now in force, or hereafter enacted.”

Section 271 provides:

“ The clerk of the local camp is hereby made and declared to be the agent of such camp and not the agent of the head camp, and no act or omission on his part shall have the effect of creating a liability on the part of this society, nor of waiving any right or immunity belonging to it.”

It is clear that Taylor, the clerk of a local camp, could not waive the by-laws of the society. Lord v. National Protective Society, 134 Mich. 357 (96 N. W. 443). See, also, Showalter v. Modern Woodmen of America, 156 Mich. 390 (120 N. W. 994), where this court said:

“ But the contract was with the great camp, and the waiver must be by the great camp, and a waiver which would bind the great camp must arise from a failure to do some act which it was its duty to do to avoid the waiver.”

The following cases bear upon the same question: Cook v. Insurance Co., 84 Mich. 12 (47 N. W. 568); Kocher v. Catholic Benevolent Legion, 65 N. J. Law, 649 (48 Atl. 544, 52 L. R. A. 861, 86 Am. St. Rep. 687); Field v. Knights & Ladies of Security, 64 Neb. 226 (89 N. W. 773); Royal Highlanders v. Scovill, 66 Neb. 213 (92 N. W. 206, 4 L. R. A. [N. S.] 421); Modern Woodmen of America v. Talbot, 76 Neb. 621 (107 N. W. 790). But, even if Taylor had had authority to bind defendant, what he said, according to the testimony of plaintiff, would not constitute a waiver of the by-laws. His statement that, if plaintiff would pay a part of the loss to her daughter-in-law, the claim would be allowed, was not acted upon by plaintiff, nor was any expense incurred by her in reliance thereon. Indeed, she rejected the proposition at the time it was made.

It will be noted that the by-law in question fixes no time limit within which the board of directors must pass upon the claim. We think it clear that the board may not arbitrarily and indefinitely postpone action upon a claim and so defeat a beneficiary’s right of action. It is its duty to act in good faith and within a reasonable time. Was the delay in the case at bar an unreasonable one under the circumstances F We think not.

The investigating member of the board received much information in the home town of the insured tending to establish:

(1) The fact that he had become intemperate in the use of alcoholic liquors; and
(2) That he had come to his death, either directly or indirectly, through such use.

It must be remembered that in the payment of death claims this society is administering a fund in the nature of a trust, and that it is not only its privilege, but its bounden duty, to make all reasonable investigation to the end that the funds of the society may not be paid out to those not legally entitled to the same, thereby weakening the protection to those members of the society who are in good faith keeping to the terms of the contract between them and it. The correspondence clearly indicates that the board was proceeding with reasonable celerity and in good faith to determine whether or not payment should be made upon the certificate, without contest, and, as indicated by the letter of June 23d, that decision would have been reached within a few days thereafter.

A verdict should have been directed for the defendant upon this ground, but without prejudice to the commencement of another action, in case the decision of the board should be adverse to the claimant.

Reversed, and no new trial ordered.

Ostrander, Moore, Blair, and Stone, JJ:, concurred.


author: Moore, J.

text:
    MURRAY v. INNER SHOE TIRE CO.
    Judgment — Action Pending — Appeal and Error — Res Judicata.
    A judgment is not res judicata in a subsequent action involving the same matter where, at the time of the second trial, no judgment has been entered on the prior verdict, and the time for appeal has not elapsed.
    Error to Kent; Perkins, J.
    Submitted June 17, 1910.
    ( Docket No. 79.)
    Decided July 14, 1910.
    Rehearing denied December 30, 1910.
    Assumpsit by A. Linn Murray against the Inner Shoe Tire Company on a promissory note. A judgment for plaintiff on a verdict directed by the court for an insufficient amount is reviewed by him on writ of error.
    Reversed.

      Maher & Barnard, for appellant.

      Richard O. Qoodspeed, for appellee.
   Moore, J.

This action was commenced in justice’s court June 8, 1909, to recover the amount due upon a promissory note for $400, given by the defendant to the plaintiff, Murray, December 5, 1908, payable upon demand with interest at 6 per cent. Under the instructions of the court, the jury rendered a verdict in favor of Mr. Murray for a sum less by $217.35 than the amount due upon the note. The case is brought here by writ of error.

The defendant is a manufacturing corporation of which Mr. Murray was a stockholder and a traveling salesman. On November 1, 1908, there was found to be due him $1,509.31. A settlement of this amount was made December 5, 1908, by giving him the note in suit for $400, and four other notes for $250, $250, $300, and $309.31, respectively. He continued to work for the defendant and it made advances to him and opened a new account with him, which included not only what was charged against him for advances made and credits for commissions earned under his contract, but other items of debit and credit. After this suit was commenced in justice’s court, the defendant filed a bill of particulars of set-off to the note.

Mr. Murray also brought suit upon each of the other notes in justice’s court. While these were pending, defendant commenced a chancery suit against Mr. Murray to enjoin his proceeding with the justice’s court cases, which chancery suit was later dismissed. Mr. Murray recovered a judgment in justice’s court upon the note sued upon, and an appeal was taken to the circuit court. In the meantime he brought suit upon the open account in the superior court. A defense of set-off was interposed therein. That case was heard before the one now before us was tried in the circuit court. A jury returned a verdict therein as follows:

“ The jury say upon their oath that the defendant did undertake and promise in manner and form as the plaintiff hath in his declaration in this case complained against him; and that they find and fix the plaintiff’s claim in this case at the sum of $1,448.70, and further that they find that the defendant has made payment to the plaintiff in the sum of $1,654.72, and that the defendant has overpaid the plaintiff in the sum of $211.02, and that they find the plaintiff has no cause of action; therefore, on motion of Richard C. Goodspeed, attorney for said defendant, Inner Shoe Tire Company, it is ordered and adjudged by the court now here that the plaintiff’s claim in this case be fixed and established at the sum of $1,443.70, and that that has been paid, and further that the plaintiff has been overpaid in the sum of $211.02, and further that as to matters set forth in the plaintiff’s declarations herein, the plaintiff take nothing, and that the defendant go therefore without day, and the said defendant, Inner Shoe Tire Company, do recover against said A. Linn Murray, its costs and charges herein to be taxed, etc.”

Upon the trial of the case now before us in the circuit court, the defendant withdrew its plea of set-off, and the trial judge, upon its motion, directed the jury to deduct from the amount due upon the note the $211.02 referred to in the verdict of the jury, upon the theory that there had been an adjudication which bound the parties, and which should be treated as a payment on the note. It is from this action the appeal to this court is taken, and many reasons are assigned why this action is error.

It is not necessary to go into these in detail. At the time this case was tried in the circuit court no judgment had been entered upon the verdict of the jury, and the plaintiff still had a right to appeal the case to this court. It was stated upon the argument that an appeal had been taken. Under the facts disclosed by the record, what was done by the jury in the superior court was not such an adjudication as to justify the trial court in applying the amount as a payment made upon the note sued upon in this case. As the record then stood, the trial judge should have directed a verdict in favor of the plaintiff for the amount of the note and interest thereon.

Judgment is reversed, and a new trial ordered.

Ostrander, Hooker, McAlvay, and Brooke, JJ., concurred.


author: Hooker, J. Per Curiam.

text:
    BOOS v. SCUDDER.
    1. Constitutional Law — Intoxicating Liquors — Statutes.
    Whether Act No. 291, Pub. Acts 1909, gives too wide a latitude to the sales which a wholesaler may make, is a legislative, nota judicial, question.

      •2. Intoxicating Liquors — Ordinance of Village — Prohibition.
    A village ordinance enacted under 1 Comp. Laws, § 2769, and prohibiting any person from conducting a saloon or bar for the sale of intoxicants, does not preclude the wholesaling of liquors, except such as may be sold in a saloon or at a bar.
    ■3. Same — Words and Phrases — Saloon.
    The word saloon, as used in the statute, refers to places where persons come to buy liquor to be drunk on the premises.
    4. Same — Wholesale and Retail — License.
    Prohibition of saloons and saloon bars in a village, by ordi- ' nance, is no justification for refusing to grant a license to a wholesale liquor dealer.
    •5. Same — Mandamus.
    Mandamus will not issue to compel a village council to grant a liquor dealer’s license, where it was found by the lower court that the council adjourned at once after the application and bond were filed under a pending motion to adjourn, and had not sufficient time after filing to consider the matter.
    -6. Same.
    Nor will the writ compel the granting of a license which, on the face of the application, will authorize the sale of spirituous or intoxicating liquors in the barroom of a hotel, in such village.
    7. Same — Municipal Corporations —Villages —Warner-Cram-ton Act.
    The Warner-Cramton Act (Act No. 291, Pub. Acts 1909) did not repeal the general village law, or prevent villages from suppressing saloons under the prior statute.
    8. Statutory Construction — Repeals by Implication.
    Repeals by implication not being favored, acts which are not irreconcilable should be allowed to stand.
    ON REHEARING.
    Mandamus — Intoxicating Liquors — License.
    It appearing to the court, on rehearing, that the question of relator’s right to a wholesaler’s license was litigated in the court below, and that, under the opinion of this court he was entitled to such license, mandamus was granted to compel the council to grant it.
    Certiorari to Kalamazoo; Knappen, J.
    Submitted July 15, 1910.
    (Calendar No. 24,117.)
    Decided September 27, 1910.
    Rehearing granted December 22, 1910.
    Former opinion modified January 9, 1911.
    Mandamus by Frank H. Boos to compel Charles B. Scudder, president, and others, constituting the common, council of the village of Augusta, to approve a liquor bond. An order denying the writ is reviewed by relator-on writ of certiorari.
    Reversed.

      Harry G. Howard, for relator.

      Frost & Farrell and Stewart & Jacobs, for respondents.
   Hooker, J.

On June 10, 1910, the relator made and. filed an application to the council of the village of Augusta, in Kalamazoo county, for a license to carry on the business of selling at wholesale brewed or malt liquors. He accompanied it with a surety company’s bond in the proper amount. The council adjourned to June 16th, on which day a motion not to consider the wholesale bond was carried, whereupon while the council was in session, but. after a motion to adjourn had been made, an application for a. retail license and a retail dealer’s bond were presented. Adjournment was then voted by the council without action. Relator thereupon petitioned the circuit court for a mandamus to compel the council to accept the-bonds and issue the licenses, and, upon the return to the order to show cause, the prayer of the petition was denied, and relator has brought the case to this court by certiorari.

Augusta is organized under the general law for the incorporation of villages, being chapter 87, 1 Comp. Laws. Subchapter 7 of said chapter 87 contains the provision conferring powers upon the council, among which is “to suppress saloons for the sale of spirituous and intoxicating liquors,” etc. 1 Comp. Laws, § 2769, subd. 7. On March. 14, 1910, the council adopted the following ordinance:

“ Ordinance No. 35.
“ To suppress saloons and bars for the sale of spirituous and intoxicating liquors.
“Section 1. The village of Augusta ordains, that it shall be unlawful for any person or persons to own, establish or operate, in person, or by clerk, servant, agent or employé, any saloon or saloon bar for the sale of malt, brewed, spirituous, fermented, vinous and intoxicating liquors in the village of Augusta.
“Sec. 2. It shall be unlawful for any person by himself, his clerk, servant, agent or employé, to sell, offer for sale, or keep for sale, in any saloon or bar in the village of Augusta, any malt, brewed, spirituous, fermented, vinous or intoxicating liquors.”

A penalty was provided by other sections which we think it unnecessary to include in this opinion.

The council bases its refusal to issue the licenses and approve the bonds upon this ordinance. In answer, the relator cites Act No. 29Í, Pub. Acts 1909, known as the “Warner-Cramton Law,” which was an act to amend certain sections of the general law providing for the taxation and regulation of manufacturing, selling, etc., of spirituous and intoxicating liquors, and to add 35 new sections thereto, and which his counsel contends repealed subdivision 7, 1 Comp. Laws, § 2769, of the general village law. He claims, also, that the selling of liquor at wholesale not to be drunk upon the premises where sold is not keeping a saloon, and therefore the council had no power to prohibit the selling at wholesale, and, furthermore, that the ordinance does not by its terms include wholesale houses. The act of 1909 (section 2) defines a “wholesaler” as follows:

“ Wholesale dealers shall be held and deemed to mean and include all persons who sell or offer for sale such liquors and beverages at wholesale in original trade packages and in bulk and by measure not to be drunk on the premises.”

We do not overlook respondents’ claim that this gives a wide latitude to the sales that a wholesaler may make, but, if it is too wide, it is a legislative, and not a judicial, question; and we observe that in section 1 of Act No. 291 that matter has received attention.

Assuming that the ordinance is valid, we are constrained to say that it does not in terms preclude the wholesaling of liquor, except where it shall be sold in a saloon or at a bar. The only construction to which subdivision 7, § 2769, is susceptible, is that the word “saloon” refers to places where persons come to buy drinks of liquor, to be drunk there. It is the common understanding of a liquor saloon that is meant, and the ordinance means no more. We are therefore of the opinion that the ordinance is no obstacle to the authority of the council to license wholesaling, and no justification for a refusal to do so, in a proper case. As we said in Village of Sparta v. Boorom, 129 Mich. 558 (89 N. W. 436):

“We are not prepared to say that a wagon might not constitute a saloon, or that a saloon might not be movable, or that it would be any the less a saloon because it was continually moved from place to place, but that is not the charge here. The general village incorporation act did not authorize the prohibition of the sale of liquor in general terms, and it omitted to enlarge the meaning of the word ‘saloon.’ The term has a common and well-understood meaning, and this meaning must be applied to this act. 1 How. Stat. § 2; 1 Comp. Laws, § 50. It did not authorize the village council to enlarge its meaning by calling every man who should make a sale of liquor a saloon keeper, and the cases which hold that a single sale may be evidence to show a man a saloon keeper, where it occurred in a saloon, are not in point.”

To this we may add that it does not follow that a wholesaler may not so conduct his business as to make him chargeable with keeping a saloon, or doing it in a saloon or over a bar. See Rattenbury v. Village of Northville, 122 Mich. 160 (80 N. W. 1012). We think that the case of Craig v. Werthmuller, 78 Iowa, 598 (43 N. W. 606), is plainly distinguishable from this case, and that the allusions to saloons and saloon purposes have no application here, and it seems to us so obvious that we do not feel justified in elaborating the question of its application. Counsel for respondents offer two other reasons wfiy this writ should not issue:

(1) That the council in good faith refused to pass upon the sufficiency of the wholesaler’s bond, and has not considered the question, apparently relying on the ordinance as a sufficient reason.
(2) That the application and bond were filed with the council pending a motion to adjourn and that the council almost immediately adjourned.

The court found this to be true, and that the council had not had “sufficient time after such filing to consider the same to justify the court in ordering their approval.”

We must accept this finding of facts as true, and therefore the writ cannot issue. But as this is a reason that is technical in its nature, we consider the other reason, viz., that their refusal is justified by the ordinance, to settle a question which is really involved, and to prevent the necessity of further litigation by another application for mandamus as to the retailer’s license. This application on its face asks a license to sell spirituous or intoxicating liquors in the barroom of a hotel. It therefore was an application to sell over a bar, if not in a saloon, and we think it within the prohibition of the ordinance, and therefore, unless the ordinance is void, the writ cannot issue.

It is relator’s claim that the general village law was repealed by the Warner-Cramton act of 1909. Act No. 291, Pub. Acts 1909. The law for the incorporation of villages (chapter 87, 1 Comp. Laws) was passed in 1895 (Act No. 3, Pub. Acts 1895)! As we have seen, it conferred power upon councils to prohibit saloons. Unless it has been repealed by implication, it is yet in force, and the ordinance is a sufficient answer to relator’s claim, as this later act in its turn took precedence over the liquor law of 1887 (Act No. 313, Pub. Acts 1887, 2 Comp. Laws, § 5379 et seq.), and gave to Augusta local powers on this subject. It is claimed that this was done by the amendments of 1909.

Starting, then, with the proposition that the exclusive provisions of the law of 1887 (which we have held repealed ordinances on this subject at the time it was passed) were limited in their application by the law of 1895, which reenacted the authority to village councils, we must inquire whether Act No. 291, Pub. Acts 1909, is consistent with the continued existence of subdivision 7 of the village incorporation act for it having been made to appear by the passage of the act of 1895 that, notwithstanding the interpretation previously put upon this identical subdivision 7 in the former village incorporation law, it was the legislative will that the power should be reconferred upon the village councils, we must find some subsequent legislation showing a contrary intent, or conclude that there was no intention to repeal it. The act of 1909 amended and added to the general liquor law of 1887. Some of the reasons given in People v. Furman, 85 Mich. 110 (48 N. W. 169), have lost their force by the passage of the law of 1895; e. g., that' this was a general liquor law, and that it especially provided that all inconsistent laws should be repealed. There is nothing in the law of 1909 to show that it or the law as amended was designed to be of more general application than that of 1887, after the limitation was put upon it by the new village act, and there is an absence of any new repealing act. We find nothing in the law of 1909 justifying the inference that it was designed to take from incorporated villages the power reconferred by subdivision 7 of the .act of 1895. Upon this subject, where one act is special, see a discussion in People v. Wenzel, 105 Mich. 70 (62 N. W. 1038). Neither of these acts is special, but there may be seen an analogy arising from the fact that the general incorporation act confers special powers to a class of localities. There is nothing irreconcilable in these two acts, and, as said by Endlich on Interpretation of Statutes, § 210:

“ But repeal by implication is not favored, (a) It is a reasonable presumption that the legislature did not intend to keep really contradictory enactments in the statute book, or to effect so important a measure as the repeal of a law without expressing an intention to do so. Such an interpretation, therefore, is not to be adopted unless it be inevitable. Any reasonable construction which offers an escape from it is more likely to be in consonance with the real intention. Hence it is a rule founded in reason, as well as in abundant .authority, that, in order to give an act not covering the entire ground of an earlier one, nor clearly intended as a substitute for it, the effect of repealing it, the implication of an intention to repeal must necessarily flow from the language used, disclosing a repugnancy between its provisions and those of the earlier law so positive as to be irreconcilable by any fair, strict, or liberal construction of it, which would, without destroying its evident intent and meaning, find for it a reasonable field of operation, preserving, at the same time, the force of the earlier law, and construing both together in harmony with the whole course of legislation upon the subject.”

See, also, Lake v. Village of Cedar Springs, 162 Mich. 569 (127 N. W. 690).

We are of the opinion therefore that the order of the learned circuit judge was correct, and the same is affirmed.

Bird, C. J., and Ostrander, Moore, McAlvay, Brooke, Blair, and Stone, JJ., concurred.

ON REHEARING.

Per Curiam.

Counsel filed a motion asking a further order in this cause; i. e., that a mandamus issue requiring the village board to convene and approve the application for a wholesaler’s license, and that relator have two weeks thereafter within which to file a satisfactory bond, procure its approval, and file the same. A rehearing was had.

The relief asked by the prayer of the petition in the circuit court was that a mandamus issue to compel the village council to approve the ‘ application and bonds ” and the clerk to certify to such approval. Apparently the cause was there litigated upon the question of the validity of the ordinance, and the authority and good faith of the council in refusing to accept surety bonds. Under his finding of facts and law, fie held that the council had authority to refuse surety bonds, and denied the writ on two grounds: (1) That the ordinance was valid, and precluded a retailer’s license on this application; and (2) that the council had not consented to accept a surety bond on either application. We saw no evidence that he was asked to compel action granting the prayer of the petition alone, or that he considered such question. The cause was brought here by certiorari, and the question is whether the trial court erred in his application of the law to the facts.

Were the case one of original jurisdiction in this court, we might have granted the relief now sought. See Hosier v. Township Board, 45 Mich. 340 (7 N. W. 897). Where, however, the case originates in the circuit court, the general rule in certiorari cases prevails, and we will review only questions raised below. Patterson v. Goodrich, 31 Mich. 225; Witherspoon v. Clegg, 42 Mich. 485 (4 N. W. 209). Doubtless the circuit court might have granted the writ, although not specifically asked to compel action on the petition separately; but if his attention was not apparently challenged to this, or any desire for such action expressed, we would assume that he did not consider it, but disposed of the matter upon the bond, as his opinion shows:

“ The court has some doubt as to the right and power of the village to accept the bond of the relator to engage in the wholesale liquor business under the authorities cited, but does not rest its determination upon that point alone, but rather upon the fact that the village council has not consented to accept a surety company’s bond in preference to a personal bond, and that they are the sole arbiters of that decisive question.”

While we declined to reverse his order, our opinion shows that we intimated that a wholesale liquor license might issue. Had the council afterward been asked to grant a license separately upon the same, or, if necessary, upon a new application, it is reasonable to suppose that it might have received favorable and speedy action. • An ex-animation of the record shows, however, that one of the issues of the respondents raised this question, and a certificate of the circuit judge recently filed shows that it was a controverted question, though not specifically disposed of by him. We are of the opinion that' the relator was entitled to such relief, and therefore modify the former opinion in this respect.

The writ will issue as prayed as to the granting of the application for a wholesale license, subject to the provisions of law in relation to the required bond.


author: Blair, J.

text:
    UNION TRUST CO. v. ELECTRIC PARK AMUSEMENT CO.
    1. Corporations — Pledge — Mortgages — Power to Secure Loans.
    Under provisions in a corporate charter authorizing the company “to issue bonds and secure the same by mortgage, pledge, deed of trust or otherwise,” the corporation had authority to issue bonds and pledge them to secure a debt evidenced by a corporate note.
    2. Same — Pledge—Bonds—Corporate Powers.
    Mortgage bonds of the par value of §38,000 were a proper subject of pledge by the managing directors of the corporation, to secure a debt of §30,400, notwithstanding a resolution of the stockholders limiting the price at which the bonds could be sold to ninety per cent, of the par value.
    3. Same — Pledge—Negotiable Instruments — Board op Directors — Validity op Meetings — Estoppel.
    A pledge of such bonds was valid under a resolution of the board of directors purporting to be adopted at a duly called meeting at which two of the directors attended, without any notice to the third director who held only a nominal amount of stock, lived in a different State, and never attended the corporate meetings, where the two directors conducted all the corporate business, obtained funds by means of the loan, and where the corporation acquiesced in their act for two years without objection.
    4. Pledge — Assignments—Rights op Pledgee — Mortgage.
    And where the corporation assigned its interest in the pledged bonds to another creditor as security for its debt, and such creditor purchased the bonds of the pledgee on default at public sale, it became the owner of both liens, entitled to collect interest on the bonds from the time the interest had been paid on the debt secured thereby, not being limited to interest from the date of purchase.
    5. Attorney and Client — Fees on Foreclosure Proceedings —Reasonableness.
    The trial court having excluded testimony as to the particulars of services rendered by complainants’ solicitors on foreclosure proceedings, and having fixed the amount at $2,500 on the basis of general testimony as to value, the record is remanded, and such court is required to take further proofs as to the details thereof and the capacity in which the solicitors acted in various proceedings, for which they claim compensation.
    Appeal from Wayne; Murfin, J.
    Submitted June 8, 1910.
    (Docket No. 27.)
    Decided July 14, 1910.
    Re-Rearing denied December 8, 1910.
    Bill by the Union Trust Company, as trustee, against "the Electric Park Amusement Company, the Electric ■City Amusement Company, and the Detroit Trust Company, trustee, for the foreclosure of a trust mortgage. 'The Detroit Lumber Company was made defendant by the cross-bill of the defendants. From a decree for complainants, defendants and said Detroit Lumber Company appeal.
    Modified and remanded for further proofs.

      Russel, Campbell, Bulkley & Ledyard (Harry C. Bulkley, of counsel), for complainant.

      George W. Radford, for defendant Electric Park Amusement Company.

      Emanuel T. Berger, for cross-defendant, Detroit Lumber Company.
   Blair, J.

The bill of complaint in this case was filed to foreclose a mortgage executed by the Electric Park Amusement Company, a corporation organized under the laws of the State of Delaware, but having its principal place of business at the city of Detroit, and delivered to complainant as trustee to secure a bond issue of $80,000, October 26, 1905.

The defendants to the original bill were' the Electric Park Amusement Company, the Electric City Amusement Company and the Union Trust Company as trustee under the second mortgage (subsequently the Detroit Trust Company, trustee, was substituted in place of the latter). There are two cross-bills, the first filed by the two defendant amusement companies, to which the Union Trust Company, trustee, complainant, the Union Trust Company, trustee, a bondholder, the Union Trust Company, a corporation, and the Detroit Lumber Company, are defendants; the second by the Detroit Trust Company, succeeding trustee under a second mortgage, against the last above named defendants, and the two amusement companies.

The first mortgage, given by the Electric Park Amusement Company to the Union Trust Company as trustee, sought to be foreclosed in this case, was authorized by resolution of the stockholders passed at a meeting thereof on October 25, 1905, reading as follows:

“Whereas, for the purpose of acquiring title to the land now occupied by Electric Park Amusement Company at the corner of Jefferson avenue and Belle Isle bridge approach, Detroit, Michigan, and to make additional improvements in the way of construction of a pier on the river front, it is necessary and desirable that the company borrow the sum of eighty thousand dollars ($80,000), therefore,
“ Besolved, That for the purpose aforesaid, this company issue its first mortgage bonds in the amount of eighty thousand dollars ($80,000), divided into one hundred and fifty bonds of the denomination of $250, $500 and $1,000 each, all to be dated October 26, 1905, and to be payable within twenty years, such bonds to bear interest at the rate of not to exceed five per cent, per annum, payable semi-annually, both principal and interest being payable in gold coin of the United States of America, of the present standard of weight and • fineness, if so demanded by the holder; that such bonds be secured by a first mortgage or deed of trust of all the property, rights and franchises now owned by the company or hereafter to be acquired by it during the lifetime of said mortgage or deed of trust, and the income thereof; the bonds and mortgage in other respects than those above indicated, and the provisions for the payment of the same, to be referred to the board of directors of the corporation for determination.
“And further resolved, That said board of directors of this corporation are hereby authorized and directed to have said bonds and mortgage or trust deed properly executed by the officers of said corporation, and to negotiate the sale of said bonds and sell the same at a price not less than 90 per cent, of the par value thereof.”

At the time of the adoption of this resolution by the stockholders, the directors of the corporation were Arthur H. Gaukler of Detroit, president, and who controlled a majority of the stock; Francis P. Dreher of Detroit, secretary, and Harry W. Davis Of Wilmington, Delaware, who held ten of the $1 shares of stock.

On the same day that the foregoing resolution was adopted by the stockholders, Gaukler and Dreher held a directors’ meeting, at which they adopted and certified a resolution, as follows:

“Whereas, it is desirable to provide sufficient time for the proper negotiation and sale' of the eighty thousand dollars of bonds above authorized, and the company requires forty thousand dollars for present uses:
“ Therefore, resolved, That the president and secretary be and they are hereby authorized to borrow the sum of forty thousand dollars from the Union Trust Company of Detroit, for the term of one year, with the privilege of renewal for an additional year, with interest at five per cent, per annum, payable semi-annually, and to execute the company’s note for said loan and secure the same by pledge as collateral security of the entire issue of eighty thousand dollars of bonds above authorized.
“Arthur H. Gaukler, “President.
“Francis P. Dreher,
“ Secretary.
“The undersigned, president and secretary, respectively, of the Electric Park Amusement Company, hereby certify that the foregoing is a true and correct copy of a resolution passed by the board of directors of said Electric Park Amusement Company at a meeting duly called and held on October 25, 1905, at which meeting the following directors, Arthur H. Gaukler and Francis P. Dreher, being a quorum of the said board, were present.
“Arthur H. Gaukler,
“ President.
“Francis P. Dreher,
“ Secretary.”

On the basis of this resolution the Union Trust Company loaned $40,000 to the Electric Park Amusement Company, which it used for legitimate purposes. Forty-two thousand dollars of the bonds were sold and released from pledge and a sufficient amount of the proceeds applied upon the $40,000 loan to reduce it to $12,666.68.

April 28, 1906, the Union Trust Company loaned to the Electric Park Amusement Company $30,400 and took the following contract note:

“$30,400.00. Detroit, Mich, April 28, 1906.
“ Four months after date, Electric Park Amusement Company promises to pay to the order of the Union Trust Company, of Detroit, at its office in the city of Detroit, Michigan, thirty thousand four hundred and 00-100 dollars, for value received, with interest at the rate of six (6) per cent, per annum, having deposited herewith, as collateral security for the payment hereof, and all other liabilities, absolute or contingent, present or future, of the undersigned to the said Union Trust Company, thirty-eight thousand dollars ($38,000.00) par value, of bonds of said Electric Park Amusement Company of the issue of October 26., 1905; which property, or any part thereof, with any other property hereafter deposited in substitution therefor or in addition thereto, the holder of this note, in default of payment thereof, is authorized to sell, at the expense of the undersigned, at public or private sale, at its option, and at its option to purchase at such sale, and to apply the proceeds in payment of this note, and the balance upon such other of said liabilities as the holder may elect.
“It is further agreed that if default be made in the payment of any installment of interest when the same shall become due, or if in the opinion of the holder of this note, the said security shall depreciate in value, said holder may elect without notice that this obligation is due and payable on demand.
“ It is further agreed that said Union Trust Company shall have the right to hold and apply, at any time, its own indebtedness or liability to the maker hereof, or any securities or property of the maker in its custody or possession, as security for the payment of any liability due, or to become due, from the maker hereof.
“Electric Park Amusement Co.,
“By Arthur H. Gaukler, President.
“By Francis P. Dreher, Sec. & Treas.”

The foregoing loan was based upon the following certified action of the directors:

“ The undersigned, respectively, president and secretary of the above named corporation, do hereby certify that the following is a true and exact copy from the books of the corporation of a resolution which was regularly adopted at a special meeting of the board of directors of said corporation, duly called and held on the 25th day of April, A. D. 1906, a quorum being present at said meeting, to wit:
“On motion of Francis P. Dreher, secretary, seconded by Arthur H. Gaukler, president, it was resolved that the president and secretary be authorized and directed to execute and deliver to the Union Trust Company, of Detroit, Michigan, the note of the Electric Park Amusement Company of Delaware, for the sum of $30,400, payable four months after date, with interest at the rate of six per cent, per annum, and to execute and deliver to the said Union Trust Company, as security for the payment of said note, a collateral assignment of $38,000 of bonds now held in the hands of the said Union Trust Company as collateral to a note of $12,666.68, with the usual conditions for the sale of said bonds in case of any default in meeting the conditions of said note, and to deliver together with said note and said collateral assignment the said bonds; that from the proceeds of said loan the president and secretary pay to the Union Trust Company all the indebtedness now existing from this company to the Union Trust Company; and that $15,000 of par value of stock of the Electric Park Amusement Company be delivered to F. M. Delano for services in securing loan.
“(Corporate Seal).
“Arthur H. Gaukler,
“ President.
“Francis P. Dreher,
“Secretary.”

On said April 28, 1906, The Electric Park Amusement Company and the Detroit Lumber Company entered into the following agreement:

“An agreement entered into between the Electric Park Amusement Company, a corporation organized under the laws of the State of Delaware, of Detroit, Michigan, party of the first part, and the Detroit Lumber Company, a corporation organized under the laws of the State of Michigan, of Detroit, Michigan, party of the second part, at Detroit, Michigan, on the 28th day of April, 1906, witnesseth:
“Whereas, that heretofore, to wit, on the 5th day of March, 1906, the parties hereto did enter into a contract— a copy of which contract is hereto attached, marked Exhibit A; and
“Whereas, said party of the second part has this day released in full its lien and claim to the ten thousand dollars ($10,000) of bonds of said party of the first part created by said agreement; and
“Whereas, in consideration of such release, said party of the first part is willing to assign to said party of the second part as collateral security to the payment of its debt, as more specifically stated and provided for in said Exhibit A, to which reference is hereby made and which is made a part hereof, except as herein provided, to said party of the second part all of its interest in and to said thirty-eight thousand dollars ($38,000.00 ) of its bonds, subject to the rights and lien of the Union Trust Company, of Detroit, Michigan, to said bonds, said bonds being now pledged to the Union Trust Company to secure the payment of the principal and interest of its loan to said party of the first part, which loan is for the sum of thirty thousand four hundred dollars ($30,400 ):
“Now, therefore, in consideration of the premises, the said party of the first part does hereby assign unto said party of the second part its interest in said thirty-eight thousand dollars ($38,000) of its bonds as collateral security to the payment of the debt of said party of the first part to said party of the second part.
“It being expressly provided, however, by the parties hereto that this assignment is made subject to the lien of said Union Trust Company to any and all of said bonds. It being further understood that said party of the second part has no interest whatever in the same until after the payment in full of both principal and interest by said party of the first part to said Union Trust Company of its said loan of thirty thousand four hundred dollars ($30,400).
“In witness whereof, the said” Electric Park Amusement Company has hereunto subscribed its name by its president and secretary-treasurer, and affixed its corporate seal the day and year first above written; and the said Detroit Lumber Company has hereunto subscribed its name by its president and secretary, and affixed its corporate seal the day and year first above written.
(Corporate Seal).
“Electric Park Amusement Co., “ By Arthur H. Gaukler, President.
“Francis P. Dreher,
“Secretary-Treasurer.
“Detroit Lumber Co.,
“By E. L. Thompson, President.
“Henry Otis, Secretary.”
(Corporate Seal).

The Electric Park Amusement Company having defaulted as to the $30,400 note, the Union Trust Company sold at public sale the $38,000 of bonds to the Detroit Lumber Company for $31,500, which canceled the indebtedness of the amusement company to the Union Trust Company, leaving a surplus of $163.18, which was paid over to the Detroit Lumber Company.

The Electric Park Amusement Company conveyed its property to the Electric City Amusement Company, which was a reorganization of the first named company. Further facts will be found in the case of Schmidt v. Gaukler, 156 Mich. 243 (120 N. W. 746).

Among the corporate powers of the corporation, as specified in its articles of association, are the following:

“To issue bonds, debentures, or obligations of this corporation from time to time, for any of the objects or purposes of the corporation, and to secure the same by mortgage, pledge, deed of trust, or otherwise.”

The by-laws contain, among others, the following provisions :

“ The property and business of the company shall be managed and controlled by a board of three directors who shall at all times be stockholders, and at least one- of whom shall be an actual resident of Delaware. * * *
“ Regular meetings of the directors shall be held on the fourth Monday of each month at the office of the company in Detroit, State of Michigan, at twelve o’clock noon, or by order of the directors elsewhere, on a day and at an hour to be fixed by the board. No notice of regular meetings of the board shall be necessary. A majority of the whole board of directors shall be necessary at all meetings to constitute a quorum for the transaction of business. Special meetings of the board may be called by the president on three days’ notice to each director, either personally or by wire; special meetings may be called in like manner on the request in writing of two directors.”

Director Davis never came to Detroit and the minutes show that he never attended any of the directors’ meetings ; and that he never was sent any notice of any meeting. Mr. Gaukler, president of the company, and Mr. Dreher, secretary, were in absolute and complete charge of all the business of the company and signed all agreements and conveyances in its behalf.

From the decree entered in favor of complainant defendants have appealed to this court.

Counsel for defendants concede that the bond issue was legal and that the mortgage is a lawful security as to the $42,000 worth of bonds sold, but contend as to the $38,000 of bonds, as averred in the cross-bill of the Detroit Trust Company:

“That said attempted pledge was wholly illegal, being entirely beyond the scope and purpose of said trust mortgage and the resolution authorizing the issue of said bonds, beyond the scope and powers of said Electric Park Amusement Company as a corporation, and beyond the scope and powers of the officers and directors of said Electric Park Amusement Company, and in violation of the authority given by the stockholders to the directors of said. Electric Park Amusement Company for the sale of said bonds; and that the action of the officers and directors of said company in so attempting to pledge said bonds, was taken at an illegal meeting thereof, if any, in violation of the requirements of the by-laws of said company, all of which facts were fully known, at the time, by said Union. Trust Company, which dealt with the matter under such circumstances as to put said Union Trust Company upon inquiry as to the legality of said transaction, in all of its phases.”

The important question is whether the pledge of the $38,000 of bonds was beyond the power of the corporation to make, under any circumstances. Counsel for defendants argue that the provision of the charter empowering the corporation “to issue bonds, etc., * * * and to secure the same by mortgage,” etc., considered in connection with the general corporation laws of Delaware prohibiting the exercise of “ any other corporate powers, except such incidental powers as shall be necessary to the exercise of the powers so given,” amounts to a statutory prohibition against pledging the corporation’s bonds. In the language of counsel:

“The mortgage in question in this case covered all of the corporation’s real estate and ‘ also all other property and assets, real and personal, of every name and nature, which the said amusement company now owns or may hereafter acquire.’ The bonds secured by said mortgage became the debts, not property, of the corporation, as soon as issued and sold as the stockholders prescribed; the bonds were never property of the corporation that could be pledged to secure other debts; they were debts only to secure which property of the corporation could be pledged. The quotation from the corporate powers of the company, on page 15 of complainant’s brief, has no other meaning. The power ‘ to issue bonds * * * and to secure the same by mortgage, pledge, deed of trust, or otherwise,’ does not mean power to issue bonds and secure other debts by pledge of those same bonds.”

We do not so construe the charter provision. Conceding that the power “to issue bonds, debentures or obligations * * * and to secure the same by mortgage, pledge, deed of trust or otherwise,” does not contemplate the issuing of bonds and the securing of the same by a pledge of the bonds so issued, it does not follow that the charter provision did not contemplate the issuing of “obligations ” and the securing of them by a pledge of corporate bonds. The contract note for $30,400 is denominated in its terms “this obligation,” and we think it was an obligation within the meaning of the charter provision. Emerson v. Steel & Spring Co., 100 Mich. 127 (58 N. W. 659); Hill v. Bloom, 41 N. J. Eq. 276.

The company had express power, therefore, to secure the payment of the obligation in question by the pledge of any property which could be pledged. We have no doubt that the mortgage bonds were a proper subject of pledge and this, notwithstanding the resolution of the stockholders. Jones on Pledges (2d Ed.), §§ 70-74; 2 Thompson on Corporations, § 1192; Union Cattle Co. v. Trust Co., 149 Mass. 492; William Firth Co. v. Trust Co., 122 Fed. 569; 3 Cook on Corporations (6th Ed.), § 709; New Memphis Gaslight Co. Cases, 105 Tenn. 268; Hatch v. Coddington, 95 U. S. 48.

The remaining question on this branch of the case is whether the pledge was invalid because of the failure to notify the third member of the board of directors of the special meeting at which the resolution was adopted. It is apparent that notification of Davis would have been an idle formality, since he never attended the meetings of the corporation in Michigan, where its entire property was located. The corporation permitted Gaukler and Dreher to exercise all the functions and powers of the directorate, and there is no evidence that any other stockholder or director is complaining, but they alone appear to be carrying on this litigation, setting up the falsity of their own certificates to defeat a just debt. The contract was one within the lawful powers of the corporation; it received $40,000 of money on the first pledge of bonds, which it used for its lawful purposes; it paid from the proceeds of its sales of bonds a large part of this indebtedness to the Union Trust Company; six months later it received $30,400 more, which it also applied to its own proper purposes, and not until September 23, 1907, nearly two years after the making of the first pledge, did it raise any question as to the validity of the pledge. Under such circumstances the corporation must be deemed to have ratified the action of the two directors in pledging the bonds and to be estopped to question its validity. Jones v. School District, 110 Mich. 363 (68 N. W. 222); Clement, Bane & Co. v. Clothing Co., 110 Mich. 458 (68 N. W. 224).

The decree of the circuit court found that the Detroit Lumber Company was entitled to collect on the coupons attached to the $38,000 of bonds only from September 23, 1907. The lumber company has appealed from this portion of the decree, claiming that it is entitled to collect on the interest coupons from May 10, 1907, to which time the interest had been paid on the indebtedness secured by the bonds. We are of the opinion that the position of the lumber company is well taken and that the decree should have made May 10th the starting point. Warner v. Iron Co., 3 Woods (U. S. C. C.), 514.

By the agreement of the parties the amusement company assigned its interest in the bonds to the lumber company, subject to the lien of the Union Trust Company “as collateral security to the payment of the debt of said party of the first part to said party of the second part,” and the lumber company, by its purchase of the bonds, became the owner of both liens, and is entitled to enforce both, subject to an accounting for the surplus, if any.

The remaining question for our consideration relates to the compensation of the trustee and its counsel. With reference to this subject, the circuit judge said:

“As far as the compensation to be allowed this complainant is concerned, that is the only other thing I have left to consider. That is a matter that is very difficult, at all times, for a court to pass upon, and, I confess, it is more or less of an embarrassment to pass upon it. As far as the solicitors of record are concerned, there can be no doubt that, at different times, they have acted in connection with this matter in three different capacities, and there can be no doubt, at those times, they were entirely within their rights, and doing it with entire propriety. They were interested as solicitors for the trustee under the first mortgage; they were interested as solicitors for the trustee under the second mortgage; they were interested as solicitors for the trust company itself, as a creditor. How to tell when they were acting in one capacity, and when they were acting in another, is something that I am not going to attempt to do, or reconcile, because it is perfectly obvious that, at some time, what they did was for their benefit in all three capacities, and, at other times, it was only for the benefit, possibly, in one or two capacities. For example, in the litigation to which reference has been had, in the Schmidt Case, they appear to have gone into that litigation in one capacity, and come out of it in an entirely different capacity, as I read the record, in the Supreme Court’s opinion. From my knowledge of these counsel, and my belief in their integrity, I have no reason to question, nor has it been questioned, in this proceeding, that they were taking every step according to their best and conscientious judgment. That being true, when they-swear, under oath, they think their services, as rendered — without going into particular details, which I find I am to blame for, for not hearing — were worth $2,500, I see, under the circumstances of • this litigation, as they have been disclosed before me, in this hearing, no particular reason whatsoever to question that bill. That being true, I think I will allow it as presented. The same remarks apply with equal force to the charges of the trustee, and you may prepare a decree accordingly.”

As stated in the opinion and as shown by the record, the court refused to permit the defendants to go into the details of the services or to clearly separate those which were a proper charge in this suit from those which were not. Under such circumstances, we are constrained to remand the case for further proofs upon this subject. Upon hearing the further proofs, upon this subject alone, a decree may be entered by the circuit court in accordance with this opinion and the further finding of such court.

Bird, C. J., and McAlvay, Brooke, and Stone, JJ., concurred.


author: Hookek, J. Blair, J. I

text:
    PEOPLE v. TRINE.
    1. Burglary — Criminal Law — Corpus Delicti — Evidence.
    It is sufficient evidence of the corpus delicti, in a prosecution for breaking and entering a store, that the rear door was broken open while the store was closed for the night, and that articles were taken from the stock.

    2. Same — Reasonable Doubt.
    Although the court may not be able to say that the elements of the crime have been proved beyond a reasonable doubt, the testimony should be submitted to the jury, if it tends to establish the necessary elements.
    3. Same — Time op Committing.
    Whether or not the store was broken into in the nighttime, is a question for the jury, where the breaking occurred after the store was closed at nine o’clock in the evening and was discovered before sunrise, about seven o’clock next morning.
    4. Same — Evidence.
    It was error to admit evidence that respondent had in his possession, at the time of his arrest, a suit case and other articles similar to goods kept in the store, where the articles in respondent’s possession were not shown to have been the property of the merchant, or identified as taken from the store. Hooker and Moore, JJ., dissenting.
    5. Criminal Law — Conduct op Accused — Evidence.
    Evidence was admissible concerning the conduct of accused, such as false statements concerning articles which he had, and which were alleged to have been stolen, his absconding after the crime, and his presence in the town at the time the offense was committed.
    6. Same — Admissions—Statements to Oppicer.
    And no error was committed in receiving in evidence statements made by the respondent to the officer who arrested him, when the statements were not in the nature of confessions and no promise of leniency was made by the officer, who merely advised respondent that the best thing he could do would be to tell the truth.
    7. Same — Correspondence—Searches and Seizures.
    A letter tending to incriminate respondent, found in his rooms when they were searched, was competent evidence, even though it was secured without a search warrant.
    8. Same — Husband and Wife — Evidence of Wife.
    It was prejudicial error for the prosecuting attorney to call respondent’s wife as a witness, without first obtaining the consent of the accused, who was compelled to make the objection that her testimony was incompetent under 3 Comp. Laws, § 10213.
    Exceptions before sentence from Calhoun; North, J.
    Submitted October 21, 1910.
    (Docket No. 151.)
    Decided December 22, 1910.
    . Floyd Trine was convicted of breaking and entering in the nighttime, a store, not adjoining to or occupied with a dwelling house.
    Reversed.

      E. J. Dennison, for appellant.

      Franz C. Kuhn, Attorney General, H. W. Cavanagh, Prosecuting Attorney, and Fred Cavanagh, Assistant Prosecuting Attorney, for the people.

       As to proof of corpus delicti in criminal case, see note to Bines v. State (Ga.), 68 L. R. A. 33.

   Hookek, J.

The testimony offered by the prosecutor in this case tended to prove that the complainant owned a store in the city of Albion, and that upon the night of December 18th, or thereabouts, after 9 p. m. and before 7 a. m. of the following day, a panel was broken in a rear door, and access obtained to the interior of the store; that this was discovered about 7 a. m. of December 19th; also that at that time some money was found to be missing from the cash register or drawer. A few days later it was discovered that some articles of clothing were missing from the store. Some months later defendant was found in possession of some clothing claimed to be the missing articles, and he has been convicted of breaking and entering a store, “not adjoining to or occupied as a dwelling,” in the nighttime, with burglarious intent. The case is before us on exceptions before sentence.

Corpus Delicti. There was testimony in the case fairly tending to show the breaking and entering of such a store, and stealing some of complainant’s property in the nighttime. This prima facie established the corpus delicti, and, under the most rigid rule, made proof to connect defendant with the transaction admissible. People v. Mindeman, 157 Mich. 120 (121 N. W. 488). It is true that we cannot say that each of these elements was proved beyond a reasonable doubt. That is usually a question for the jury, and such, proof is not a prerequisite to the introduction of testimony identifying a defendant as the lawbreaker.

Whether this occurred in the nighttime was an open question to be decided upon the probabilities. It was after dark and the breaking was discovered soon after daylight, at any rate before sunrise. There was enough in the circumstances to warrant the jury in concluding that it occurred before daylight, and such conclusion is therefore final.

Evidence of Defendant’s Guilt. The connection of the defendant with the transaction was sought to be established : First, by his possession of clothing; second, by his conduct; third, by his declarations.

Counsel for defendant contend that his discovery in the possession of the clothing was too remote in point of time to admit of any presumption of guilt therefrom. Standing alone it is probable that such possession would be very slight evidence that he took these articles unlawfully on that, or perhaps any, occasion; but in conjunction with other facts and circumstances, such a conclusion might be a natural and proper one. There is evidence that he made false statements about the clothes, that he was in Albion that night, that he had new clothes immediately after-wards, that he went away trying to conceal his whereabouts, that he wrote to his brother that if he should tell where he was, it would get him into trouble, and that the officers were after him, and he did not want to spend five years in jail, and to destroy the envelope and letter, but to put down the fictitious name and address, so that he would not forget them, and “for God’s sake, don’t forget what I said or say a single word to any person, or my life is in danger.” If it be conceded that this was admissible testimony, there was a proper case for the jury. People v. Carroll, 54 Mich. 334 (20 N. W. 66).

In People v. Wood, 99 Mich. 621 (58 N. W. 639), we held that:

“The jury were properly instructed that the possession of stolen property found with persons accused of burglary is not prima facie evidence of the burglary, but, if they found that whoever broke and entered the mill stole the flour therefrom, then, in whosesoever possession the flour was found shortly after, it would be evidence of larceny, and they would be justified in finding such parties guilty of burglary, as well as of larceny.”

See, also, People v. Hogan, 123 Mich. 233 (81 N. W. 1096).

Errors in Admitting Evidence, (a) Possession of other articles. It was competent to show that at the time defendant was detected in possession of the clothing, he also had a suit case, cap, and other articles similar to those which were in the store at the time of the larceny, although they had not been missed, and notwithstanding the fact that there was no charge that they had been stolen, and the owner could not testify that they had been taken unlawfully on that or any other occasion. The testimony of defendant’s wife’s mother that he had such articles soon after the breaking was also competent. The value of such testimony would depend upon other facts and circumstances.

(6) Conduct of defendant. The conduct of a defendant is always admissible, e. g., his falsifications regarding the property found in his possession, or his whereabouts at the time the offense was committed, attempts to abscond, etc., etc.

(c) Declarations. The deputy sheriff was allowed to testify to conversations with defendant, at the time of their first interview, and later. At such times he said to defendant that he “would like to get at the bottom of the thing,” and he testified that he might have told him on the first occasion, as he did later, at the store and at the jail, that “the best thing he could do was to tell the truth, so that if he was innocent, we would know it.”

We are unable to find in these conversations anything in the nature of confessions that he committed the offense, but defendant did make statements which, though denials, were, by reason of their falsity, some evidence in corroboration. Among them was the statement:

“My Q-od, I must have been crazy; I don’t know why I cut them out.”

This referred to the labels on the garments at the time of the first conversation, but which were removed later. Looking at all of this evidence, it is very doubtful if the statements were made from any hope of leniency. No such .promise was made, or expectation justified, unless inferable from the statement made by the officer, that it would be better for him to tell the truth. It was proper to submit these questions to the jury, which the learned trial judge did. People v. Howes, 81 Mich. 401 ( 45 N. W. 961); People v. Maxfield, 146 Mich. 104 (108 N. W. 1087); People v. Flynn, 96 Mich. 279 (55 N. W. 834); People v. Warner, 104 Mich. 339 (62 N. W. 405); People v. Owen, 154 Mich. 574 (118 N. W. 590, 21 L. R. A. [N. S.] 520), and cases cited.

A letter and envelope proved to be in the handwriting of the defendant were introduced against objection. The letter follows:

“Albion, Mich. October 19, 1909.
“Mr. Leon Trine,
“Jackson, Mich.
Dear Brother: I suppose you thought I was kidding but I am going away today,, but don’t tell anyone. I’m in a hurry so don’t think I could see you and maybe it will be some time before I ever will. Bessie wants you to bring another of those aprons so don’t forget it, but this thing I want you to keep a secret from everyone if you tell anyone, it will get me into trouble, and I don’t like to spend five years in jail. When you go to the post office ask for mail for O. B. Ball, that’s my letter, I don’t want a person to know where I am, don’t forget it now I dare not write to home or some one will know where I am, so just ask for O. B. Ball, general delivery, and it will be all right. Soon you get it then destroy the envelope and give the letter to ma, but be careful and it will be all right. Destroy this letter so no one will hot see it but put down the name so you won’t forget it anyway; I said when I leave it would be in a hurry, and I never be in Albion again, for years to come. Maybe I can see you some times, but how or when I don’t know so I will close for this time, but for God’s sake don’t forget what I said, or say a word to a single person or my life is in danger, so good bye.
“Your Brother, F. T.”

The envelope is addressed, “Mr. Leon Trine, Jackson, Michigan. General Delivery.” If this letter was obtained with other property by the officer at Grand Rapids, from defendant’s effects, at his boarding house, as his counsel claim, our attention is not called to the proof of the fact, but this is immaterial. The testimony was admissible under the rule laid down in the cases of Cluett v. Rosenthal, 100 Mich. 193 (58 N. W. 1009, 43 Am. St. Rep. 446), and People v. Campbell, 160 Mich. 112 (125 N. W. 42).

We are of the opinion that there was testimony justifying a submission of the case to the jury.

The action of the prosecuting officer in calling defendant’s wife to the stand as a witness against her husband, without first getting the consent of the defendant, was improper, and may well have prejudiced his case., This was within the criticism of such conduct in the cases of People v. Van Alstine, 57 Mich. 82 (23 N. W. 594), and Laird v. Laird's Estate, 127 Mich. 27 (86 N. W. 436); Thompson v. Railway Co., 91 Mich. 255 (51 N. W. 995); Johnson v. Railway Co., 135 Mich. 360 (97 N. W. 760), and cases cited; Cavanagh v. Riverside Township, 136 Mich. 660 (99 N. W. 876); Hillman v. Railway, 137 Mich. 184 (100 N. W. 399); Oliver v. Jessup’s Estate, 137 Mich. 645 (100 N. W. 900); Spencer v. Simmons, 160 Mich. 292 (125 N. W. 9). Such errors by the prosecuting officer are not easily cured. People v. Treat, 77 Mich. 350 (43 N. W. 983); People v. Nichols, 159 Mich. 355 (124 N. W. 25). The statute prohibits testimony by a wife against a husband without his consent. By calling defendant’s wife, he was compelled to assert his non-consent, which was thereby brought to the attention of the jury, who might naturally draw prejudicial inferences.

The conviction is reversed, and the cause remanded for a retrial.

Moore, J., concurred with Hooker, J.

Blair, J. I

concur in reversing the case upon the ground stated, but am of the opinion that evidence of the possession of the suit case and other articles not shown to have been the property of the complainant, or to have been taken from the store, was incompetent.

McAlyay and Brooke, JJ., concurred with Blair, J.