text:
    HULETT v. MARINE SAVINGS BANK.
    Cancellation op Instruments — Promissory Notes —Fraud — Negligence — Estoppel.
    On a bill to cancel certain promissory notes on the ground of fraud in their procurement, evidence examined, and held, that complainants were not estopped from setting up their defense to the notes by their negligence in allowing themselves to be tricked into signing the notes without reading them, believing them to be a contract imposing no obligation upon them without further action.
    Appeal from Grand Traverse; Mayne, J.
    Submitted January 30, 1906.
    (Docket No. 71.)
    Decided March 5, 1906.
    Bill by Byron Hulett and others against the Marine Savings Bank, Margaret Lyons, and others to cancel and restrain the collection of certain promissory notes. From a decree for complainants, defendants Marine Savings Bank and Lyons appeal.
    Affirmed.
    The 12 complainants filed this bill to restrain the collection and negotiation and secure the cancellation of three promissory notes for $800 each, signed by them, on the ground that their signatures had been obtained by fraud, misrepresentation, and without consideration; that they did not sign them knowing that they were promissory notes; that they signed them -on the representation by those who procured them that they were merely a preliminary contract of which they formed a part, and from which they have been separated so as to form three promissory notes. The active participants in the fraud were alleged to be the defendants John and Titus Lyons, D. C. Smith, and Harvey G. Wilson. The Marine Savings Bank was made defendant as claiming to be the holder of the notes, and the Bank of Kingsley was made the defendant, as the custodian thereof. The Marine Savings Bank claims to be the bona fide owner and holder of the notes. The Bank of Kingsley is the mere custodian, and has no interest in the matter. Defendant Margaret Lyons was not made a party to the original bill, but was subsequently made a party as the one who had given her own note to the Marine Savings Bank for $1,400 to which as collateral security the notes in dispute had been assigned. The defendants the Marine Savings Bank and Margaret Lyons alone answered and made defense. Decree was entered for the complainants upon pleadings and proofs taken in open court.
    In September, 1903, defendant John Lyons, who with his wife then lived in. Marine City, owned a stallion, which he testified had cost him about $600, and which he had owned for about six months. He had made one attempt to syndicate the animal. By “syndicating” is meant the organization of a corporation, issuing stock to the individual incorporators, and when the transaction is completed the title to the animal is transferred to the corporation. Defendants Wilson and Smith, who up to that time were strangers to Lyons, made an arrangement with him to syndicate the animal for $2,400; and after payment of expenses, which were not to exceed $400, the money was to be divided between them. Smith and Wilson went to the township of Kingsley, Grand Traverse county, and there undertook to form a syndicate of farmers. The plan was to get 12 stockholders each to put in $200, and receive his certificate .of stock for that amount. Smith and Wilson prepared the papers with which to approach the complainants. They first went to the complainant Fenstermacher and with Fenstermacher to complainant Hulett. Fenstermacher and Hulett, at the request of Smith and Wilson, went with them and introduced them to other complainants. The claim of the complainants is that Smith and Wilson represented to them that the papers they were signing were merely a contract agreeing to get together, form a syndicate or corporation, and each then to pay cash $200 or give his note therefor, and purchase the stallion; that no money obligation was incurred by the papers they signed; and that they were to meet at a certain place and time, inspect the stallion, and then complete the arrangement if they were satisfied. All testified that the papers they signed were attached and were a part of one and the same contract. The complainants signed them usually in the field or on the highway, and did not have the papers spread out before them. Their testimony is that Wilson held the paper sometimes upon his knee, and always with the papers so covered that only the signatures could be seen. Xt appears that four papers were in fact signed, — one reading as follows:
    “Milt Henry, No. 5180. [Name of Stallion.] John Lyons and Harvey G. Wilson, agree to sell the above-named stallion for $2,400 to the other undersigned subscriber, who, wishing to improve their stock, agree to pay John Lyons, Harvey G. Wilson, $200 for each share in said stallion. Capital stock, $2,400. No. shares, 12. Payment to be made cash; or one-third in one year, one-third in two years and one-third in three years, secured by notes, with interest. 1st payment September 14th, 1904; 2d payment September 34th, 3905; third payment September 34th, 1906. Lyons and Wilson.”
    Then follow the names of the complainants, each subscribing for one share. The notes attached thereto read as follows:
    “On September 14th, 1904, after date, for value received, I promise to pay to the order of Harvey G. Wilson and John Lyons, eight hundred dollars, at the Bank of Kingsley, Michigan, with interest at six per cent, payable annually.” [Signed by all the complainants.]
    All the complainants testified that Wilson and Smith assured them that the papers signed were merely a part of one contract, and that they signed them without any idea that they were signing promissory notes. About the time that Smith and Wilson commenced their syndicate operation in Kingsley township, the stallion was shipped to Kingsley and placed in the stable of complainant Fenstermacher who kept a livery, and was put in a box stall, under lock and key, under the exclusive control of Smith and Wilson. The animal was in fact defective, and was of little worth. The representations of Smith and Wilson as to the condition and value of the stallion were false. When Smith and Wilson had secured the 12 signatures, they telegraphed defendant John Lyons to come to Kingsley and complete the arrangement. That was the day fixed for the meeting of the subscribers to form a corporation and to complete the preliminary agreement as they understood it, and as it had been represented to them by Smith and Wilson. Mr. Lyons arrived at Kingsley about 12 noon on Friday. The meeting of the stockholders was to take place that afternoon. Wilson had the notes, and he and' Lyons hired a livery and drove 14 miles to Traverse City, instead of taking the cars. Took the train for Marine City, and there disposed of the notes on the following Monday, in the manner hereinafter stated. Meanwhile, the subscribers met, Mr. Wilson had flown, though he had agreed to meet them. The stallion was then brought out from the stable, and his defects disclosed. Mr. Smith who was then present, informed them that they had executed promissory notes; that Wilson had taken them and gone; that they were probably negotiated before then; threw down the key to the stall where the stallion was kept, and departed. On arriving at Marine City on Saturday, Lyons and Wilson took the notes to the Marine Savings Bank, and offered them to Mr. Carmon, the cashier, at a discount. Mr. Carmon refused to take them, and told him that if the defendant Mrs. Lyons would indorse them they would cash them. It was finally arranged that Mrs. Lyons was to give her note for $1,400, and these notes should be left with the bank as collateral. The entire arrangement was made with Mr. Lyons, and for his benefit, except he testified it was understood that when these notes were collected, the balance over and above what was due the bank was to be applied to an indebtedness of Mrs. Lyons. Mrs. Lyons never had possession of the notes. After Mr. Lyons had consummated the arrangement at the bank, Mr. Saph, one of the directors, went to the hotel kept by Mr. Lyons, secured Mrs. Lyons’ signature to the note for $1,400, paid her the cash. She immediately returned it to bim. He took it back to the bank, and Mr. Wilson and Mr. Lyons disposed of it according to their previous arrangement. The complainants immediately filed this bill, of complaint.

      Pratt & Davis, for complainants.

      John W. Patchin, for defendant Lyons.

      Avery & Walsh, for defendant Marine Savings Bank.
   Grant, J.

(after stating the facts). That a gross fraud was perpetrated upon the complainants is fully established by the evidence. No one disputes their version of the representations made to them by Smith and Wilson, and the manner in which their signatures were obtained. Smith and Wilson were not produced by the defendants as witnesses. Their absence is unaccounted for. Probably, like all criminal birds of passage, they had flown. Complainants were induced to sign written instruments which were a part of one contract, or were so attached as to appear so, but were afterwards separated so as to appear valid promissory notes. Smith and Wilson resorted to representations and devices to prevent the papers being read by the complainants before signing, and while they were signing arranged to cover the written and printed parts above so that they should not be observed by the signers. It is not easy to determine the mysterious manner in which these signatures were obtained without the signer's obtaining information of just what they were signing. Criminals of this sort always work in mysterious ways, and resort to methods and schemes often difficult to understand. They are undoubtedly familiar with the decisions of the courts on papers obtained by fraud, and. practice the greatest ingenuity and shrewdness to avoid the decisions, and to enable purchasers to say that they obtained them in good faith.

The scheme, as represented to the complainants under-their testimony, was reasonable. Twelve men were required to constitute the syndicate or organization. No one of the 12 knew anything about the stallion. Only one, Fenstermacher, ever had seen him. Smith and Wilson were strangers to them. If their representations as to the character, quality, and value of the horse were true, each was willing to put in $200 in the purchase of the stock of the syndicate. If 12 such men were found they were then to-meet, examine the horse, and if found as represented they would then form the syndicate, take the stock and purchase the horse. The scheme as found in the agreement and notes is utterly unreasonable, and it is diffiult to conceive that even the most ignorant and unwary would knowingly make such an agreement. Persons of even less than average common sense do not buy property without seeing it, especially from total strangers, and that a. piece of property of so much greater value than usual. Besides, it is altogether improbable that these men would have signed a note on which each was individually liable-for the whole amount. The object of the conspirators, was to prevent the examination of the property and the instruments they were signing, and to secure the names of the complainants to promissory notes which they could dispose of as such. VVe are not so concerned with the mysterious methods by which this was accomplished as we are by the fact that it was accomplished. The defense is good unless complainants are estopped to assert it by their own gross negligence. The law governing such, transactions is well settled by the decisions of this and other courts. The only difficulty arises in applying the law to the facts of the particular case. The first case upon this subject in this court is Gibbs v. Linabury, 22 Mich. 479, wherein the court quoted with approval the English case of Foster v. Mackinnon, L. R. 4 C. P. 704, in which it was said:

* ‘ The defendant never intended to sign that contract [a bill of exchange] or any such contract. He never intended to put his name to any instrument that then was or thereafter might become negotiable. He was deceived, not merely as to the legal effect, but as to the actual contents of the instrument.”

This court in that case where three papers were signed said:

“ Now, when a party never designed to put or cause to be put any sort of negotiable paper in circulation, when the thought of doing so never entered his mind, when he has never bargained to do so, when he' has never consciously been privy to any attempt to set such paper afloat, how can it be said that his will in any way assented to the concoction of such a contract so as to make him an object of the rule ? ”

In Anderson v. Walter, 34 Mich. 113, the defendant signed two papers which he had only heard read, and neither was a note. The court say:

“No man has a right to suppose that a crime is about to be committed, or that he is going to be defrauded by having a paper of an entirely different tenor substituted in the place of one he has just heard read and is about to sign, nor that a negotiable promissory note will be lurking in the depths of an instrument like those referred to. And he is not therefore required to take any steps to guard against such a contingency.”

In Soper v. Peck, 51 Mich. 563, the court, speaking through Justice Cooley, said:

“It cannot be disputed that defendants’ evidence tended to show that he had had a fraud practiced upon him and that very probably he had been made to put his name to a note when he supposed he was signing something different. If the jury believed this he was entitled to their verdict, unless his negligence was so gross as to preclude his making the defense as against a bona fide purchaser of the paper.”

It is true that there are some discrepancies in the testimony of the witnesses who were subjected to a rigid cross-examination. One testified that he read the papers, but he also testified that the papers produced were not like the ones that he signed. The learned circuit judge found that the representations testified to by complainants were made by Smith and Wilson; that they were deceived thereby; that the papers were not what Smith and Wilson represented them to be; and that they were free from such negligence as would bar their defense. We think his conclusions in this respect were correct. Mr. Lyons was not a witness for the defendants, but was called in rebuttal by the complainants. Smith and Wilson were acting for him as he testified, and he is responsible for their acts. Mrs. Lyons was the mere willing stool pigeon for her husband, or the conduit through which he and Wilson succeeded in making the arrangement with the bank. He testified:

“I arranged with Mr. Carmon [the cashier] in my second interview that he would let me have $1,400, that I would have to have my wife sign a note to that amount, and to turn over these notes as collateral.”

She is financially responsible. The bank is not the absolute owner of the notes. They were taken simply as collateral. It is quite probable that Mrs. Lyons and Mr. Wilson, finding-that the bank would not purchase the notes with their indorsement, and having been unable to dispose of them at Kingsley, resorted to the scheme of getting them into the hands of the bank as collateral, hoping in this way to make the bank bona fide holder. Mrs. Lyons is not a bona fide holder. The notes were never assigned to her. She never had them in her possession or control. She knew of the alleged sale of the stallion to the farmers. She was connected in the livery business with her husband; he owning some of the horses and she others.

It is unnecessary to determine the doubtful question whether the bank is a bona fid,e holder. Mr. Carmon (its -cashier) was cognizant of several things which might be held to put a reasonably prudent man upon inquiry. But the bank cannot suffer. Mrs. Lyons is financially responsible, and the bank only holds the notes as collateral security. It is urged that Fenstermacher and Hulett were as active in procuring the signatures of the other complainants as were Smith and Wilson, and that they were as guilty of fraud practiced upon the others as were Smith and Wilson. It is true that they went around with Smith .and Wilson to see other parties; that Fenstermacher took them around with a team from his livery. We find no evidence that they participated in the false representations, or that they themselves knew or had good reason to know that the representations were false and fraudulent.

We think the decree of the court was correct, and it is affirmed, with costs.

McAlvay, Ostrander, Hooker, and Moore, JJ.} concurred.


source: Caselaw Access Project

author: Hooker, J.

license: Public Domain

text:
    KERLIN v. SWART.
    1. Innkeepers — Property op Guests — Loss—Action—Evidence —Custom.
    In an action against an innkeeper, under section 5316, 2 Comp. Laws, for the value of property stolen from a guest, it is proper to permit witnesses accustomed to traveling to state that it is customary for guests at hotels of the class of defendant’s, to take such property as that in question to their rooms.
    2. Same — Argument op Counsel — Prejudice.
    For counsel to state in argument that the jury know that when a robbery is committed in a house, nine times out of ten the person who does it is an employé or agent of the house, is improper, but is held, not prejudicial in view of testimony indi, eating the culpability of the servants.
    3. Same — Instructions—Care Required op Guest.
    It appearing that the room had been entered a few weeks before, and defendant claiming that plaintiff was negligent in leaving his window near a fire escape open, it was proper for the court in his charge to state that the failure of defendant to inform plaintiff of the previous robbery might be considered in determining whether plaintiff was reasonably prudent.
    Error to Wayne; Frazer, J.
    Submitted February 7, 1906.
    (Docket No. 101.)
    Decided March 5, 1906.
    Case by Fentriss G. Kerlin against James H. Swart and William O. Swart, copartners as Swart Brothers, to recover damages for the loss of certain personal property by theft while a guest in defendants’ hotel. There was judgment for plaintiff, and defendants bring error.
    Affirmed.

      James McNamara and Frank C. Cook, for appellants.

      Emmons & Helfman, for appellee.
   Hooker, J.

The defendants are hotel keepers in Detroit; their house, the Cadillac, being a large hotel Several stories high. The plaintiff, while a guest, lost property worth several hundred dollars by theft; it being taken from his room at night, while he was asleep. The discovery was made through a night watchman, who, while making his rounds, found his door into the hall open, and awakened the plaintiff and asked him to ascertain whether he had lost anything. He did so, missing a watch valued $100, chain $22,'locket and charm$25, knife $4.50, sleeve buttons $12, money $24.75, diamond pin $250, a total of $438.25. There was a fire escape at his window, and a door between the room occupied by him and that next to it. He went to sleep with the upper half of the window down, and the corresponding inside shutters open for ventilation. This action was brought to recover the amount lost, and resulted in a judgment for the plaintiff. Defendants have appealed. -

The action was brought under the provisions of section 5316 of the Compiled Laws, reading as follows:

“ That hereafter every landlord or keeper of a public inn or hotel in this State, who shall constantly have in his inn or hotel an iron safe, in good order, and suitable for the safe custody of .money, jewelry or other valuable articles belonging to his guests or customers, and shall keep posted conspicuously at the office, and on the inside of every entrance door of every public, sleeping, bar, reading, sitting, and parlor room of his inn or hotel, notices to his guests and customers that they must leave money, jewelry and other valuables with the landlord, his agent, or clerk, for safe-keeping; that he may make safe deposits of the same in the place required for that purpose; shall not be liable for any money, jewelry, or other valuables of gold or silver, or rare and precious stones, that may be lost, if the same is not delivered to said landlord, hotel, or inn keeper, his agent or clerk, for deposit, unless such loss shall occur by the hand or through the negligence of the landlord, or by a clerk, or a servant employed by him in such hotel or inn: Provided, That nothing herein contained shall apply to such amount of money and valuables as is usual, common, and prudent for any such guest to retain in his room or about his person.”

It was admitted that the safe and notices required were provided, and that the latter were properly posted. The plaintiff sought to excuse his failure to leave his valuables with the clerk by proof that it “ was usual, common, and prudent” for guests to retain such valuables in his rooms. There was testimony that it would have been easy for a person to enter from the fire escape, inasmuch as plaintiff left his windows open, and we do not find this testimony disputed. The door between the rooms was opened, and plaintiff’s trunk, which he had placed against it, was-moved to one side. The outer door opening from the hall was found ajar by the watchman, according to his testimony. Both doors had locks which were under the control of the plaintiff, and which were found in good condition. Counsel for the plaintiff contended that the larceny must have been committed by an employe of the defendants, while defendants claimed that if the doors were-locked, as plaintiff testified that they were, it must have been the act of an outsider, who entered over the fire escape from an adjoining building from which it was readily accessible at the platform in front of the window. It is. not denied that the determination of .these questions was for the jury; but defendants’ counsel complain of the introduction of certain testimony, which they say was inadmissible, of arguments of counsel alleged to have been improper, and of the charge of the court.

One Boling testified that he thought it “the usual thing for travelers to take their watch and little money they might have, stick pins, and things of that nature to their rooms,” and he had “never heard of anything different,” and that it was “ usual and customary for a person, having an article of personal wearing apparel, stud, or ring to keep it in his sleeping room overnight.” D. R. Parsons testified as follows:

“I live in Detroit, and am assistant manager of the traveling service department of Parke, Davis & Co. I travel on the road, and have stopped at hotels of the character and standard of the Cadillac. From my experience and observation I think it is prudent for travelers at hotels of this character to keep a watch of the value of $100 in their room at night; also a chain and charm of the value of $45, and a pair of sleeve buttons in cuffs of the value of $12, and a diamond pin of the value of $250.
Q. I wish you would state as to the articles of jewelry of substantially these value, whether they are rings or pins, stick pins, whatever they may be, and worn for personal apparel, whether it is usual and customary for prudent travelers in this class of hotel to keep such articles as that in their rooms at night when they are asleep ? (Objected to by defendants. Objection overruled. Exception. )
“A. Yes; I think it is usual and customary.”

Cross-examination:

Q. Have you ever seen people leave a $250 diamond pin on a dresser ?
“A. I do not know that the pins I have seen them wear were diamonds. I have seen them have jewelry, going-up when I have gone up to my room when other have done. I have never noticed them deposit it in a safe. I never roomed with traveling men, and therefore would not be able to see, and I do not know of any particular instance of leaving a $250 pin on a dresser. I have never observed any traveling men going to bed and leaving it on there, because I never roomed with traveling men. * * * • I have seen travelers go up to their rooms with their jewelry at night-time, when they were ready to retire.”

Fred Ranney testified:

“I live in Detroit, and am in the real estate business and other enterprises, have traveled extensively over the country, stopped at hotels of the character of the Cadillac, have observed other travelers at similar hotels. From my experience ánd observation of hotels of this character, I think a prudent traveler, customarily and usually, would keep in his room at night, when he is sleeping there, a Swiss movement watch of the value of $100; also a chain and charm of the value of substantially $45 or $50, pin or stud for his tie or shirt, with a diamond of the value of $250, a pair of sleeve buttons of the value of $12 and $25 in money. * * * I have never been on the road traveling, and don’t know what is usual and customary for traveling men to do on the road, except from my observation. I am not a traveling man myself.
The Court: Other people have a right to stop at hotels beside traveling men.
“ I have never had a $250 diamond pin myself. I have a watch worth $100, and have never seen a traveling man leave a diamond pin of that value in a hotel. I have seen people do it, but not traveling men. I have seen my wife do so at various places — Murray Hill Hotel, N. Y.
Q. And that is the observation that you are testifying to?
A. Yes, sir. You asked me the question, and that is the only one I have ever observed leaving a valuable pin.
Q. Your own wife; and you were with her ?
“ A. Yes, sir.”

Charles Chadwick testified:

“ I live in Detroit, but was at one time employed in New York City in the Grand Union Hotel as clerk.. Being such clerk, I had opportunities for seeing travelers who came and stayed at that hotel. I was clerk for a year and a half. In a way the Grand Union Hotel is in the same grade with the Cadillac. It is considered a first-class hotel.
Q. I wish you would tell the jury from your experience as a clerk in that hotel whether it is usual and customary for travelers stopping there overnight to keep in their rooms such an article as a watch valued at $100 during the night, while they were sleeping in their rooms. (Objected to. Objection overruled. Exception for the defendants.)
“A. Yes, sir; it is customary.
Q. While you were clerk there, did you know of any traveling man staying at that hotel having a watch of that character and placing it in the safe? (Objected to. Objection overruled. Exception.)
“A. No, sir.”

Counsel say that this testimony does not show a general custom, and that opinion evidence of a general custom is inadmissible. It was for the jury to determine whether these valuables were such as it was usual, common, and prudent for guests to retain in their rooms. The observation of persons in the habit of traveling and of hotel clerks, both of which classes would be likely to know what travelers commonly did, is competent. A witness who says that he frequently saw travelers take such valuables to their rooms on retiring, and seldom, if ever, saw them deposit the same at the office, gives testimony tending to prove the general usage. Such testimony is not the mere statement of an opinion as to what the custom is, though the indication of an opinion is perhaps unavoidable. The testimony is admissible as tending to prove the practice, and is not to be excluded because of danger that a jury will conclude therefrom that the witness has an opinion that such facts seem to justify. This testimony squares with the rule cited by counsel, viz.:

“ So, where the question at issue is the practice or usage with reference to a particular trade or business, it is for the judge to decide, as a preliminary question, whether the evidence tendered upon the question is evidence of the fact of a general usage or practice prevailing in the particular trade or business, or merely the judgment or opinion of the witness. If the latter, he must reject it, as that furnishes no safe guide for interpretation.” 1 Thompson on Trials, § 336.

This was not “proof of particular instances, or of what was done by a few individuals.”

In his final argument counsel said:

Mr. Emmons: You, gentlemen of the jury, know that, if a robbery is committed in a house, nine times out of ten the person who did it is a servant or agent in the house. (To which argument defendants objected and took an exception.)”

This was an uncalled for and improper statement, but in view of the testimony indicating the culpability of the servants we are not satisfied that we should reverse the •case upon that ground.

The plaintiff testified that:

“ William Swart told me that there had been five robberies in the rooms of the hotel, including mine, since the 1st day of January. He said they had discharged several employes, one valet, and a colored fellow that they had identified pawning some stuff. The first intimation I had that a robbery had occurred in my room a month previous was when I went down to ask for a key of the room. They said they had not any. I said: ‘You usually have-two keys to a room. Where is that ? ’ He said that was. carried off when the room was robbed before. I said r ‘ When was that ? ’ He said: ‘ Two or three weeks ago. * The clerk told me that; they had not a key because the key had been carried off; that those rooms had been robbed a short time before and the key had been carried off. It looked very much to me as if the fellow who took the key had used it to get into my room.”

The court alluded to this testimony in his charge as. follows:

“Another proposition is presented to you here, and that is whether the innkeeper himself has been guilty of negligence, in that he did not inform the guest that this room was robbed before. I leave that for you to say, whether if this room had been robbed before, whether he did or did not inform the guest of that fact, so that, knowing the fact that robberies had been perpetrated, the guest would not have been put on his guard, as an additional danger to-which he was subjected in that very room. That is a proposition for you to say. If that other robbery had been committed in a similar way, and the man had entered through the fire escape in the other case, and the doors-had been all locked and the necessary precautions taken, I leave it for you to say whether the landlord ought not to have informed his guest of the additional danger he was subjected to in sleeping in a room that had been robbed before, so that he could have provided against it.”'

If the defendants knew the condition of the fire escape, as it must be presumed that they did, and the plaintiff did not, as seems probable, they owed it to him to protect him from its dangers, by seeing that they were made-known to him, thereby apprising him that more than ordinary care was required, unless such dangers were obvious. The fact that there had been an entrance there would have been unimportant, had the caution been given in another way, but, on the other hand, information of the-theft would have tended to produce the effect of adequate care. As the defendants were insisting that the-thief entered through the window, and that it was made, possible by the neglect of plaintiff to fasten it, it was proper for him to excuse his failure to lock the window by saying that he had no occasion to resort to unusual and apparently unnecessary precautions.

The learned circuit judge had just given the jury to understand that care was required of the plaintiff, by the following:

“A question arises as to how this robbery was committed. That is only material in determining whether it was committed by one class of these persons or the other. I think a man when he enters a hotel cannot throw off an invitation for people to rob him; that is, he cannot disregard all the precautions that the innkeeper has provided for his protection — that is, suppose he is on the ground floor of a hotel, and he leaves his window open, and a stranger, somebody, a stranger, enters from the outside, there is no sense in holding the innkeeper liable at all. In this case it is plain that all precautions were taken by the hotel keeper that were essential to protect this man against robbery. In other words, that they had furnished the door with perfect adjustable locks, so that, when locked upon the inside, it could not be opened from the outside, and when locked on the outside it could not be opened from the inside; there being two independent bolts. It seems that these gentlemen did all in their power to protect their guests as far as that door and locks were concerned, and that it was the duty of that man to lock them, and to take some interest to look after his property. It is claimed here that that door was locked, but it is claimed he was negligent in leaving a window partially open. As to the charge of negligence here, it depends upon the circumstances as to whether he was negligent or not, whether it would have been his duty to have seen that there was a fire escape out of the window there, and whether people could enter from the adjoining building, whether that would be a usual and a prudent thing for a man to do when a man is usually careful and prudent in looking after his own property. I leave that for you to say, and even then you must find such negligence as men of ordinary^ care would not have been guilty of; so that if this man is a stranger and enters from the outside, and the guest there could have prohibited it by ordinary caution, it would have been his duty to exercise that ordinary caution.”

He followed it with the language complained of. It was proper for him to refer to the fact as a reason for not requiring extraordinary care, or such as the actual (but unknown) conditions demanded. He might have made a more pointed application of the language, by limiting it as above, but he could not well have been misunderstood.

The judgment is affirmed.

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


text:
    GODKIN v. TOWNSHIP OF DOYLE.

    1. Taxation — Payment Under Duress — Recovery.
    One who has paid a valid tax cannot recover it back on the ground that the warrant under which the treasurer acted in making the levy was irregular and that the levy constituted duress.
    2. Same — Excessive Collection Charges — Liability oe Township.
    A township is not liable for the amount of collection fees illegally collected by its treasurer in collecting a tax, it having had nothing to do with their collection and not having had the money.
    Error to Schoolcraft; Steere, J.
    Submitted February 8, 1906.
    (Docket No. 118.)
    Decided March 5, 1906.
    Assumpsit by John Godkin against the township of Doyle for taxes paid under duress of levy. There was judgment for defendant, and plaintiff brings error.
    Affirmed.

      Albert McClatchey, for appellant.

      Virgil I. Hixson, for appellee.

       Rehearing denied June 4, 1906.

   Hooker, J.

Th© plaintiff brought assumpsit against the defendant for $494.96, with interest, upon the claim that the amount stated was paid by him to defendant’s .treasurer “under duress of levy” on his property, under and by virtue of a supplemental warrant issued by the county treasurer in March, 1904, for a tax assessed in 1903. Being defeated, he has appealed.

It is admitted that the tax was assessed, and the tax roll seasonably delivered to the treasurer, who failed to collect the tax during the life of the warrant. It is claimed that he wrote to the plaintiff at Bay City and threatened to levy on his property, if the tax should not be paid on or before a date named, and afterwards notified him that he had levied, and would sell the property levied on upon a day therein stated. On receiving this notice, plaintiff sent his attorney to see the treasurer, who reiterated his assertion that he had levied upon plaintiff’s property, and would sell it if the tax were not paid. The attorney paid under protest, but, upon questioning the treasurer further, the latter finally admitted that he had not posted the required notices, and the attorney then informed him that there could be no sale, and demanded repayment of the money, and received it. Afterwards the treasurer returned this tax upon the regular blank, in a list under the caption “Personal.” Later the county treasurer issued a supplemental warrant in the usual, form, and, upon receiving it, the treasurer immediately made a levy upon plaintiff’s property for the full amount of the tax, and the additional sum of $7 for cost of levy, and to prevent a sale the plaintiff paid the amount. He claimed:

1. The form of the return was such that it would not enable any person to ascertain what it referred to.

2. If the form of the return was sufficient, the affidavit that “this deponent has not upon diligent inquiry been able to discover any goods or chattels belonging to the person liable to pay such sums, whereupon he could levy sums mentioned in the foregoing statements as unpaid,” was willfully false and the paper void.

3. The attempt to compel payment was without legal authority, and was a legal injury, and the payment made to avoid it can be recovered as an extorted sum, for which there was no consideration.

4. The sum of $7, collected by the treasurer in the way mentioned, was an unlawful charge, and excessive under the statute, section 48 of the general tax law (1 Comp. Laws, § 3871), which limits it to $1.50.

The court found, in addition to the facts stated, that the plaintiff owned a sawmill, some 13 miles from the treasurer’s residence; that it was idle; that he had heard that plaintiff had some personal property at the mill upon which he could levy, but had no personal knowledge regarding the matter; that in the latter part of February and early in March the roads were blockaded with snow, and the treasurer was unable to go there and make a levy, which he attempted to do after February 26th, when he failed to receive a remittance from the plaintiff. He received from the plaintiff $487.96, and returned 4 cents, being the excess of the $7 over the fees claimed. The finding of the circuit judge shows that the taxes were valid, and that no claim was made that they were unjust or inequitable, and that therefore it was not shown that the township had money which in equity or good conscience it ought to repay to the plaintiff, and that under the case of Minor Lumber Co. v. City of Alpena, 97 Mich. 499, there could be no recovery. Counsel seeks to distinguish that case from the present one by claiming that the case is not brought under the statute, section 53 (1 Comp. Laws, § 3876), permitting “a voluntary payment under protest,” but is a case where the payment was made under duress.

The plaintiff, expressly admitting the tax to be valid, plants his claim upon the proposition that the treasurer had no authority to collect the tax under the second warrant, although a valid tax. He does not cite authorities directly in point, apparently relying upon cases where it has been held that a treasurer could not sue and recover taxes where he had not made a valid return of the unpaid ■tax under section 55 (1 Comp. Laws, § 3878). In 2 Cooley on Taxation (3d Ed.), p. 1488, it is said:

“ In general, an action can only be maintained [to recover a tax paid] when the following conditions are found to concur: 1. The tax must have been illegal and void, and not merely irregular.”

We may omit the other essentials. We have not such a case, and the court did not err in saying that the plaintiff had failed to make a case. We do not wish to be understood as saying that we recognize the validity of the attemptéd distinction between taxes “ voluntarily paid under protest ” and taxes “ paid under duress of levy.”

It may well be argued that the statute has merely enlarged the scope of the term “involuntary payment,”and applied to taxes voluntarily paid (so to speak) under protest the general principle theretofore applicable to what was considered involuntary payments, which, so far as we have been able to find, have never permitted the recovery back of a valid tax, which the plaintiff was in duty bound to pay, merely because of an irregularity in the method •of collection.

This view renders it unnecessary to refer to the other errors alleged, except that relating to the collection charges. As to that, we understand that the township is not responsible for the collection of illegal fees. It not only had nothing to do with their collection, but has not had the money.

The judgment is affirmed.

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


text:
    GOODELL v. AUDITOR GENERAL.
    1. Taxation — Tax Sale — Degree—Entry—Time.
    A decree for the sale of land for taxes founded on service by publication is not void because rendered before the statutory five days (section 66, Act No. 206, Pub. Acts 1893) have elapsed, where the court remains in session sufficiently long to afford the statutory opportunity for objection.
    2. Same — Order of Hearing — Form.
    An order of hearing in the form prescribed by section 3885, 1 Comp. Laws, is sufficient under section 62, Act No. 206, Pub. Acts 1893, which provides that the form therein specified shall be “substantially” followed.
    Appeal from' Houghton; Streeter, J.
    Submitted February 9, 1906.
    (Docket No. 129.)
    Decided March 5, 1906.
    Petition by Rufus R. G-oodell against Perry F. Powers, auditor general, and Allen F. Rees to set aside a sale of land delinquent for the taxes of 1894. From a decree for petitioner, respondent Rees appeals.
    Reversed, and petition dismissed.

      M. J. Sherwood, for petitioner.

      Chadbourne & Bees, for appellant.
   Hooker, J.

Appellant, Rees, purchased the S. W. £, section 29, township 52 N., range 36 W., for delinquent taxes of 1894, at' the statutory sale held in December, 1896. The day set for hearing the tax petition was November 2d. The court was in session November 2d, November 5th, and November 7th, when the decree of sale was made. The court then sat the following days, viz.: November 9th, 10th, 11th, 12th, 13th, 16th, 17th, and 21st, when it adjourned sine die. A tax deed was made May 17, 1898. The petition'and order of hearing were, respectively, entitled: “In the Matter of the Petition of Stanley W. Turner, Auditor General,” etc. Two questions are raised:

(1) Was the decree void because entered before the expiration of five days in term?

(2) Were the proceedings void for want of jurisdiction because of noncompliance with section 62 of the tax law ? Act'No. 206, Pub. Acts 1893.

This application is a petition to set aside the decree. It was granted by the circuit court, and the auditor general has appealed.

The contention that a court does not obtain jurisdiction to render a decree when the proceedings rest on publication until five days have elapsed after the day .set for hearing is not sound. No one could reasonably contend that such a defect could not be cured by vacating the decree and entering another later. The entry of the decree might be an irregularity, or, if not .even irregular, it might become void upon the face of proceedings, in case the court should adjourn sine die within the five-day period. Many such cases have been cited in the briefs. Peninsular Sav. Bank v. Ward, 118 Mich. 92; McGinley v. Mining Co., 121 Mich. 88; Gates v. Johnson, 121 Mich. 663; Wait v. McMillan, 121 Mich. 96; Miller v. Brown, 122 Mich. 147; Brown v. Mining Co., 123 Mich. 117; Brown v. Napper, 125 Mich. 117; Aztec Copper Co. v. Auditor General, 128 Mich. 618. It has been held that the-publication of the order and proof thereof gives the court jurisdiction. In re Wiley, 89 Mich. 58. Failure to enter an order pro confesso before decree was disregarded as an irregularity in Jenkinson v. Auditor General, 104 Mich. 34, and Hooker v. Bond, 118 Mich. 255. See, also, Burns v. Ford, 124 Mich. 274.

We have intimated in several cases that the entry of the decree within the five-day period is not of itself fatal, provided the court remains in session sufficiently long to afford the statutory opportunity, while in many others we have placed emphasis onl the fact of an earlier adjournment. Among the latest of these are Allen v. Cowley, 128 Mich. 530, and Wolverine Land Co. v. Davis, 141 Mich. 187. The question is now before us, and we must hold the decree valid. It is said that, although an irregularity, this being a direct attack, relief should be given, but counsel fail to show why we should set aside the proceedings. There is nothing to indicate that there was any appearance and objection filed within the five-day period. On the contrary, the absence of such is indicated by the record.

The present statute says that the clerk shall prepare an order to be signed by the circuit judge.

“ Said order shall be substantially in the following form: * * *
“ In the matter of the petition of-, auditor general of the State of Michigan, for and in behalf of said State, for the sale of certain lands for taxes assessed thereon.” 1 Comp. Laws, § 3885.

This is the form used. It is contended that the form used should have been:

“ In the matter of the petition of the State of Michigan, for the sale of certain lands for taxes assessed thereon.”

■That was the form specified in section 62, Act No. 206, Pub. Acts 1893, which required the order to be “ substantially” in that form. We think the language used a substantial compliance therewith.

We are constrained to reverse the decree. The petition is dismissed, with costs of both courts.

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


text:
    CITY OF DETROIT v. PATTEN.
    Municipal Corporations — Detroit Charter — Taxes — When Become a Debt.
    Under section 9, chap. 10, of the charter of Detroit, city taxes become a debt against the owner from the time of the listing of his property for assessment by the board of assessors, which, under other provisions of chapter 10, occurs prior to April 1st.
    Error to Wayne; Hosmer, J.
    Submitted February 16, 1906.
    (Docket No. 183.)
    Decided March 5, 1906.
    Assumpsit by the city of Detroit against John H. Patten for taxes. There was judgment for defendant on a verdict directed by the court, and plaintiff brings error.
    Beversed.

      Frank E. Doremus, for appellant.

      C. A. Kent, for appellee.
   Hooker, J.

The appellant brought an action of assumpsit to collect a tax assessed against the defendant upon personal property. It was defeated upon the claim that the defendant, being a nonresident, was not subject to taxation upon personal property in this State. The material facts can be briefly stated. The general tax law contains the following provisions:

“All personal property, except as hereinafter provided, shall be assessed to the owner in the township of which he is an inhabitant, on the second Monday of April of the year for which the assessment is made.
“ This act shall be applicable to all cities and villages where not inconsistent with their respective charters. With such exceptions, the provisions herein as to supervisors, township treasurers and boards of review, shall include all assessing and collecting officers and all boards whose duty it is to review any assessment roll.” 1 Comp. Laws, §§ 3836, 3930 (sections 13, 107, of tax laws).

Chapter 10 of the Detroit charter contains the following:

‘ ‘ Sec. 2. The board of assessors shall before the first day of April in each fiscal year assess at its true cash value all the real and personal property subject to taxation by the laws of this State within the limits of each ward respectively of'said city, and said board shall, within the same period, make out and complete the assessment,rolls, one for each ward, in books to be provided for that purpose by the common council.” Act No. 326, Local Acts 1883.
“Sec. 6. It shall be the duty of the board of assessors to cause a notice to taxpayers of said city to be published in the daily newspaper published by the printer for said city and in one other daily newspaper published in said city for two weeks prior to the first day of April in each year, that the assessment rolls will be completed on the first of April.” Act No. 472, Local Acts 1901.

The defendant, being a resident of Detroit, removed therefrom to Windsor, Ontario, on April 2, 1900, where he has since resided. On April 3, 1900, he wrote a letter to the board of assessors, stating that he was a resident of Windsor, and giving his street address. Before April 1, said board assessed him upon a valuation of $37,400, mortgage credits, a tax of $597.68, which, with interest to the time of trial, amounted to $833.58.

It is contended by counsel for the plaintiff that in Detroit the tax becomes a debt against the property owner on the day provided by the charter for the completion of the rolls by the board of assessors. Charter, chap. 10, § 2. On the other hand, counsel for the defendant urge that section 13 of the general tax law has application to all cities, as well as to all townships, and fixes the time when taxes shall become a charge against the owner, and that, although the charter requires the assessment to be made earlier, it should be so construed as not to conflict with section 13 of the general law, for the reason that any other rule would produce confusion and double assessment.

There is nothing inconsistent with such a construction in the section quoted, for the reason that while section 13 explicitly provides that all property shall be assessed to the owner in the township (and city, see section 107) of which lie is an inhabitant on the second Monday in April, etc., the charter provision (section 2, chap. 10) is silent as to when property shall be assessed to the owner, though it provides an earlier date for the completion of the rolls. There is nothing in the general law to prevent completion of the rolls before the second Monday in April, and doubtless they are often prepared, and indeed in practice must be, before that date. Section 18 (1 Comp. Laws, § 3841) requires work of this nature. It says:

“It shall be the duty of each supervisor or other assessing officer, as soon as possible after entering upon the duties of his office, or as may be directed and required by the provisions of any acts of incorporation of any city or village making special provision for such assessment, to ascertain the taxable property of his assessing district and the persons to whom it should be assessed and their residences.”

We recognize the general rule that the assessment becomes conclusive upon the day when the law requires the roll to be completed, where not inconsistent with other provisions. We are of the opinion, however, that the charter settles the question. Doubtless it is within the legislative power to fix a different date for city taxes to become a debt, than that provided by law for the general State, county, and other taxes. Section 9, chap. 10, as amended by Act No. 472, Local Acts 1901, provides that “all city taxes shall become a debt against the owner, from the time of the listing of property for assessment by the board of assessors,” etc. In view of this provision we must hold that as to city taxes, the defendant is liable. The limitation of this provision to city taxes emphasizes the defendant’s contention as to other taxes, and justifies the inference that it was the legislative intention to leave such taxes to be governed by the general tax law. The city taxes are provided for in chapter 11 of the charter.

We are constrained to reverse the judgment. A new trial is ordered.

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


text:
    FOWLES v. RUPERT.
    1. Evidence — Varying Writing — Harmless Error.
    In an action for breach of a contract to purchase certain hay,, under which defendant had the right to designate which hay-should be baled first, the admission of testimony tending to vary the terms of the writing in that respect was not prejudicial to defendant, the testimony having been stricken out, the jury having been instructed that defendant had a right to determine the order of baling, and the jury having returned a verdict of “ No cause of action.”
    2. Same — Hearsay—Harmless Error.
    It being claimed that defendant was in default in not furnishing cars in which to load the hay, the admission of testimony as to what an employé of plaintiff told him concerning the presence of cars at the station was not prejudicial to defendant, the verdict of “No cause of action” indicating that the jury found that defendant did not break the contract.
    3. Trial — Submission of Issues — Harmless Error.
    Error in submitting plaintiff’s claim to the jury is harmless to defendant where the jury return a verdict of “No cause of action.”
    4 Same — Instructions.
    Error in refusing instructions requested by defendant is harmless where the verdict shows the jury reached the desired result without hearing them.
    5. Same — Necessity of Requests.
    A defendant who has pleaded in recoupment cannot complain of an instruction authorizing the jury to find a verdict of “ No cause of action ” where he offered no request embodying his claim that the undisputed evidence showed that he had suffered damages in excess of the amount admitted to be due plaintiff on account.
    6. Costs — Appeal from Justice’s Court — .Trial after Reversal.
    Section 930, 1 Comp. Laws, authorizes the circuit judge to exercise his discretion in awarding costs on trial after reversal by the Supreme Court of a case originating in justice’s court.

      Error to Calhoun; Hopkins, J.
    Submitted February 16, 1906.
    (Docket No. 191.)
    Decided March 5, 1906.
    Assumpsit by Louis Fowles against Conrad Rupert for breach of a contract to purchase certain hay. There was judgment for defendant, and an order deducting $75 from the taxable costs, from which order defendant brings error.
    Affirmed.

      Stewart & Jacobs, for appellant.

      D. G. Salisbury, for appellee.
   Hooker, J.

This cause has been before us on a former occasion. The plaintiff had recovered a judgment, which was reversed. See 138 Mich. 150. Another trial has resulted in a verdict and judgment for the defendant, of no cause of action, and items of cost amounting to $75 were deducted to which defendant thinks himself entitled, and has appealed.

The action was begun before a justice of the peace, to recover for a balance for hay sold and delivered and for damages for the alleged refusal of the defendant to receive and pay for a quantity of hay in accordance with a contract between the parties. The evidence shows that plaintiff had two kinds of hay, timothy and clover, stacked on his farm. Defendant purchased it at $4.50 per ton, and was to have it pressed and baled on the premises, plaintiff to furnish some aid in the way of labor. The hay was for shipment in cars, to be furnished by the defendant as needed, plaintiff to draw the hay, and deliver it on board cars which defendant was to have at the station to load hay in when baled. After a quantity, of hay was baled it was delivered at the station Saturday night, and was found to be somewhat in excess of the capacity of the cars then there. On Monday, plaintiff asked defendant’s men to bale the clover hay before finishing the timothy, which they refused to do, saying that defendant’s instructions were to finish the timothy first. Plaintiff thereupon refused to assist, and after a time the defendant’s men left the place.

It is said that by the terms of the writing defendant had the right to determine which hay should be baled first, and that certain testimony tending to vary this contract was erroneously admitted. An examination satisfies us that this was stricken out. Moreover, the court instructed the jury that defendant had the legal right to determine which hay should be baled first. Again, the jury’s verdict of no cause of action was inconsistent with the claim that defendant had broken the contract by refusing to bale the clover first.

It is said that it was immaterial under this contract whether defendant furnished the cars in accordance with the contract or not. Upon the trial the plaintiff contended that defendant violated the contract before Monday morning, in failing to have the cars at Renton, and because of that breach of the contract plaintiff had a right to order the balers off the field and collect damages. In support of this claim he testified that there were insufficient cars there on Saturday, no more there Sunday, and that on Monday he sent a man to the station to ascertain whether any had arrived, and that he returned and reported in the presence of one McConnell. He was asked to state what was said, and an objection was overruled, but we do not discover that the question was answered. We think that defendant suffered no injury from this testimony, as the verdict of no cause of action shows that the jury must have found that the plaintiff, and not defendant, was the one who broke the contract.

It is said that the court erred in submitting plaintiff’s claim to the jury. If it was error it was not harmful, as is shown by' the verdict of no cause of action.

This assignment of error is covered by the last one discussed.

Error is assigned upon the refusal to give certain requests to charge. That relating to damages was sufficiently covered in the charge, while as to others the result shows that the jury reached the desired result without hearing them.

It is contended that the court erred in instructing the jury that they might render a verdict of no cause of action. The record shows that at the time suit was brought there was $53 unpaid account, the price of the timothy hay actually delivered. That amount must have been wiped out by damages sustained by the defendant, ■the verdict showing that a recoupment was permitted to ■that amount. Unless the undisputed proof showed that defendant suffered damages beyond $53, the court could not properly have instructed the jury not to render the verdict given. If the undisputed proof did show an excess of damages in defendant’s favor, the defendant’s counsel should have made a request embodying the claim now made. They not only failed to make such a request, but those made asked the court to direct the jury to find the amount of damage sustained. We cannot reverse the cause upon this ground.

The court authorized the entry .of judgment for the defendant for costs, but required a reduction of $75 from the amount taxable. We think that this was justified by the statute. 1 Comp. Laws, § 930.

The judgment is affirmed.

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


author: McAlvay, J. Per Curiam.

text:
    HUDLEMYER v. DICKINSON.
    1. Drains — Commissioner’s Authority — Trespass.
    Section 8 of chapter 8 of the drain law, as amended (Act No.. 272, Pub. Acts 1899), gives adrain commissioner no authority to dig up tiling in the highway in front of premises, placed there in consideration of the owner granting a right of way for the drain across his front, though the tiling, when, obstructed, fails to carry all the water flowing in the drain.
    2. Same — Assessment—Board of Eeview — Hearing.
    On appeal from the assessment of a drain commissioner, the-board of review have no right to. allow the commissioner to-appear before them privately and discuss matters before them, for determination.
    3. Same — Commissioner—Assessment—Fraud.
    On a bill by a landowner for relief from a drain tax, evidence-considered, and held, sufficient to show that the conduct of the drain commissioner and the board of review in the proceedings amounted to a fraud upon complainant.
    4. Same — Assessment of Benefits — Lands Included.
    A board of review, on appeal from the assessment of a drain-commissioner, have no right to refuse to include in the drainage district lands which they find to be benefited, on the-ground that other lands of the same owners are assessed in an amount sufficient to cover all benefit to lands not included - section 4350, 2 Comp. Laws, providing that all assessments, shall be upon the principle of benefits derived.
    5. Equity — Jurisdiction—Drain Proceedings — Fraud.
    The chancery court has jurisdiction to grant relief from the-fraudulent conduct of a drain commissioner in including in a drainage district land not benefited.
    6. Same — Decree.
    The chancery court cannot sit as an appellate court to review questions of regularity or charges of error in the proceedings, of a drain commissioner not affecting jurisdiction, nor can it. substitute its judgment and discretion for that of the officers to whom it has been by law confided, and a decree setting-aside a drain tax for fraud, which attempts to save that part of the proceedings not affected by the fraud, as provided by-sections 11 and 12 of chapter 6 of the drain law (§§ 4634, 4635, 2 Comp. Laws), heretofore held unconstitutional, will be, in that respect, modified on appeal.

      Appeal from Calhoun; Hopkins, J.
    Submitted October 11, 1905.
    (Docket No. 35.)
    Decided March 5, 1906.
    Rehearing denied October 1, 1906.
    Bill by Eli Hudlemyer against Edward D. Dickinson, drain commissioner, and Jesse C. Stage, C. C. Wheeler, and George S. Woolsey, members of the board of review, to restrain the levy of a drain tax. Prom a decree for complainant, defendants appeal.
    Modified and affirmed-

      Hatch & Page, for complainant.

      Elmer N. Peters (John Ü. Patterson, of counsel), for defendants.
   McAlvay, J.

Complainant owns and resides upon certain land in section 3, Clarence township, Calhoun county. Along the highway in front of his house is a county drain running towards the west, known as the “Ponto-Lininger Drain,” established more than 20 years ago. When this drain was constructed, in consideration of a right of way across his front, two tiers of 15-inch tiling, one above the other, five rods long, were put in by the authorities and the ditch filled in solidly, making an approach from the road into his premises. These tile, when obstructed, did not carry the water away fast enough, and caused backwater and overflow upon lands above. Application was made to the drain commissioner for a new outlet to this drain, taking the water from it at a point 80 rods above complainant’s premises, leading it northwesterly about a mile and emptying into what is known as “Devil’s Lake Drain.” By this outlet much land along its course would be drained and benefited, and the drain below would be relieved of the large amount of water coming down, and the tile in the drain in front of complainant’s premises would readily take care of all the water coming into it. Water from complainant’s land could not flow out of the new outlet, which was higher up the drain. The petition for these proceedings was presented in November, 1902. On April 24, 1903, defendant drain commissioner, although forbidden by complainant’s wife, tore out these tile in front of complainant’s place and made an open ditch, over which he built á bridge so that complainant could reach the highway. On May 2?, 1903, the said drain commissioner made his final order of determination, establishing this new outlet, creating the district, and making the assessment, which he filed with the county clerk May 29,1903. Complainant, July 18,1903, appealed from this assessment. A board of review was appointed, which met and heard the appeal. The assessment was sustained in all respects and the appeal dismissed with costs against complainant, which were afterwards taxed at $224.55.

Complainant afterwards filed his bill of complaint in this case charging fraudulent conduct upon the part of the drain commissioner in making such assessment upon complainant’s land, and that the board of review acted fraudulently in sustaining the same, claiming also that the assessment was a cloud upon his title. He prayed for an injunction restraining the levy of this drain tax; also that the assessment for benefits as made and reviewed in said proceeding against him be declared null and void; that the board of review be required to reconvene and reassess said lands, omitting complainant’s lands, or that, the drain commissioner be required to reassess said lands, omitting complainant’s land; that the lands found by the board of review in its report to be drainage lands be by said commissioner and board of review added to said assessment district; and for general relief. Defendants answered the bill of complaint, admitting their action, but denying the bad faith and fraud charged, and claimed the benefit of a demurrer for want of equity.

A large amount of testimony was taken by both parties upon the hearing in open court, and a decree was granted in favor of complainant as prayed. This decree need not be set out in full, but such parts of it as may be necessary will be referred to later. Complainant in this case by his bill of complaint makes out a case which, if sustained by his proofs, will entitle him to equitable relief. He claims, also, that having presented such a case as entitled him to relief, the court, having assumed jurisdiction, was clothed with power to correct any gross injustice and to relieve against fraud.

The fraudulent acts and conduct of defendant drain commissioner charged by complainant are: That without any authority he wrongfully and fraudulently, and for the fraudulent purpose of creating .the condition' which now exists in front of complainant’s premises, so that he could fraudulently claim that complainant’s land would be benefited and should be included in the assessment district for the new outlet, took out the drain tile in front of complainant’s residence, digging out all the earth which covered the tile, and made an approach or driveway from the highway into his premises, which tile and driveway had been put in as compensation to complainant for the right of way for this drain across the front of his premises in the highway; that he wrongfully included this 40 acres of complainant in the assessment district created for the new outlet of the drain, when said defendant knew that no benefit whatever would accrue to complainant; that after filing his final order of determination with the county clerk and advertising the same, he wrongfully changed the same, taking out land which he had included and determined as part of said district; that during the hearing of the appeal before the board of review said drain commissioner, in the absence of complainant, entered the room of said board while in session and made fraudulent representations to them and thereby wrongfully and fraudulently influenced them in their determination of the case before them.

The conduct of the boárd of review which complainant charges to amount to a fraud upon him is that they included these premises in the. assessment district when it appeared he was not benefited by the new outlet, and were influenced to do so by the improper conduct of the drain commissioner above stated and his representations and promises then made; that they refused to include in said district lands which were admitted by them to be benefited by the new outlet, and fraudulently confirmed the action of the drain commissioner for the purpose of putting upon complainant the large amount of costs of his appeal.

The drain commissioner had no authority whatever to dig out the tile and driveway in front of complainant’s residence. Defendants in their brief justify this action under section 8 of chapter 8 of the drain law as amended (Act No. 272, Pub. Acts 1899). This section provides that whenever any person shall obstruct any established drain it shall be the duty of the drain commissioner to remove the obstruction. It does appear that to remove this obstruction it was not necessary to tear out complainant’s driveway, nor was any notice under this section given to complainant, or proof offered to charge him with having obstructed the drain. The commissioner claims that this was done after all these proceedings in the case at bar were had establishing the new district, except determining the per cent, cost to be assessed against the lands included. It appears without dispute that complainant’s driveway over the ditch could only be retiled and replaced by a proper and separate proceeding under a petition. The drain commissioner gives no satisfactory explanation of this action by him, and in view of the fact that there had been difficulty between him and complainant, and also that he had made certain threats to get even with complainant, and that the condition created by him was considered by the board of review as bearing upon benefits by this new outlet to complainant’s premises, we conclude from the record that the commissioner created the condition for the purpose for which it was used before the board of review, and that his conduct operated as a fraud upon complainant. Considerable testimony is in the record showing conclusively that drainage lands benefited by the new outlet were not included-in the assessment district; also that certain drainage lands as above stated included in the district were, on the day of review before bina, taken out by the commissioner. He appeared before the board of review privately, and discussed matters that were before them for determination. From the testimony it appears that these were material matters relating to the condition of the ditch as created by him where complainant’s driveway was taken out. Such conduct on his part was, to say the least, improper, and the board of review .‘had no right to allow it. This was the tribunal established by law to hear this appeal and to confirm or set aside the •action of this commissioner. His statements before the board should have been made in open session, and complainant .had a right to be present and hear all the testimony and statements made in the case. Whether this conduct of the commissioner influenced the board in its finding or not is immaterial. Ex parte statements before judicial tribunals or arbitrators have always been condemned by the courts. This rule is so well established that citation of .authorities is unnecessary.

The board of review also refused to include in said district certain drainage lands which were found by them to be benefited, for the reason that other lands of the same parties were assessed in an amount sufficient to cover all benefit on lands not included. This is a misconception of the requirements of the statute. No lands benefited should have been omitted from the district and assessment, and no land can be assessed for benefits not accruing to it. Not only is this proposition fundamental, but it also is the expressed legislative intent.

“ All assessments of benefits under the provisions of this act shall be upon the principle of benefits derived.” 2 Comp. Laws, § 4350.

Complainant by his proof has established such a case as «entitles him to relief in a court of chancery, both upon the ground that the tax sought to be imposed would be a -cloud upon his title, and that the conduct of the drain «commissioner and the board of review amounted, in fact and in law, to a fraud upon him. There is no proof whatever to show that his land is benefited by the new outlet. The outlet takes the water from the main drain 80 rods above his premises, diverting it from the drain in front of him, which, if unobstructed, is of ample capacity and has. ample outlet to carry all the water that ever came to him.

If there were obstructions either on his- land or below him, the statute points out how they might have been removed. The claim that complainant suggested this new outlet is no defense to the conduct of these defendants. His explanation is reasonable. He said that these parties were trying to get this tile removed and to get an open drain in there, and he did not feel that he ought to have a drain of that sort upon him; that is the reason he did take action with reference to getting a little larger tile* or having the water conveyed some other way rather than have an open drain in front of his house. The tile and approach were removed without authority, and the evidence is convincing that, after this water had been diverted, new tile were to be put in, not by assessment according to law, but by donations from these other parties who would be benefited by the new outlet.

In an early case this court indicated that a court in chancery would have jurisdiction in drain proceedings in a proper case. Chief Justice Graves, speaking for the court, said:

If fraud in the proceedings is alleged and pointed out, or jurisdictional defects are specified, such charges may be investigated in this way and on principles which are entirely familiar.” Clark v. Drain Com’r, 50 Mich. 620.

Although a court in chancery can grant relief in this case on the ground of fraud, it cannot sit as an appellate court to review questions of regularity or charges of error in the drain commissioner’s proceedings not affecting the jurisdiction nor substitute its judgment and discretion for that of the officers to whom it has been by law confided. Clark v. Drain Com’r, supra. In this case the conduct of defendants in including complainant’s land in this district was arbitrary and fraudulent and not the exercise of official judgment and discretion.

Section 40 of the drain law of 1881 (Act No. 269, Pub. Acts 1881) has been declared unconstitutional by this court. Houseman v. Kent Circuit Judge, 58 Mich. 364. Sections 11 and 12, chap. 6, Act No. 227, Pub. Acts 1885, which were substantially a re-enactment of the provisions of section 40, were also held invalid. Mathias v. Cramer, 73 Mich. 5. In this case the court, eliminating these sections, sustained the act as valid and workable. Sections 11 and 12, above mentioned, are included in the present law (§§ 4634, 4635, 2 Comp. Laws). The decree of the court below appears to have been drawn with reference to the provisions of these sections. It orders the defendants constituting the board of review to reconvene, review, and revise said assessment; to omit complainant’s land, upon proper notice to the owners, to add the lands of others omitted therefrom and found by them to be drainage lands, and, in default thereof, that defendant drain commissioner make a new assessment and district, leaving out complainant’s land and including such lands as were found by the board to be drainage lands. Further, that said defendants be perpetually enjoined from including complainant’s land in said assessment roll and district and from placing the. same on any future assessment roll or district for said drain; and that said drain commissioner be enjoined, except as in the decree provided, from taking any further proceedings in regard to said drain until said roll and district is revised and corrected; and that all defendants be perpetually enjoined from collecting from complainant or his bondsmen costs incurred on his appeal to the board of review; that complainant do recover his costs in this suit, to be taxed against the drain and to become a charge against it, and defendant drain commissioner, within 40 days after taxation, to execute and deliver to complainant’s solicitor a drain order therefor against said drain, payable out of the first moneys coming into said drain, and, if said drain for any reason should be discontinued and given up, then said costs to be and become a charge against the original petitioners for said drain, to be collected as provided by law, and that execution issue therefor.

It will not be necessary to comment upon the provisions of this decree. Suffice it to say that, following the provisions of the invalid sections of the law, it is subject to the criticisms contained in the cases cited, and must be modified. A decree will be entered in this court in favor of complainant and against all of the defendants, declaring that the acts and doings of said defendants in determining said district and making and confirming said assessment, as far as complainant’s land is concerned, were fraudulent and void, and all of said proceedings are set aside and vacated to be begun by the drain commissioner de novo; that defendants be perpetually enjoined from including complainant’s land in the assessment district for this Ponto-Lininger drain, new oútlet; that the taxation of costs against complainant upon his appeal to the board of review be vacated and set aside and his bond on said appeal be canceled and his sureties discharged from all liability.

The decree of the circuit court, so modified, is affirmed, with costs to complainant of both courts.

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

ON MOTION FOR REHEARING.

Per Curiam.

Appellants move for a rehearing alleging that the facts found by the court are not supported by the evidence and that the result arrived at is a suggestion that the drain commissioner and board of review were prompted in their action by improper motives. .The findings are supported by a clear weight of evidence and the court in granting relief did. not consider the motives of defendants, but determined that the rights of complainant had been invaded. The intent of these parties was not involved in the case.

The motion is denied.


author: MoAlvat, J.

text:
    CENTRAL BITULITHIC PAVING CO. v. CITY OF MT. CLEMENS.
    .1. Municipal Corporations — Paving Contracts — Specifications —Incorporation in Contract.
    Where a paving contract refers to the specifications attached thereto, and the specifications refer to the contract, in such a manner that neither can be entirely understood without the other, the specifications are a part of the contract though not signed by the parties.
    2. Same — Stipulated Damages for Delay — Validity of Provision.
    A provision in a paving contract, stipulating a certain amount as damages for each day’s delay in completing the work, is within the power of the contractor to make, and is valid and binding upon him.
    3. Same — Damages for Delay — Waiver.
    Where a paving contract requires that the damages stipulated for delay in completing the work shall- be paid before acceptance of the work, an acceptance of the work by the city council without any claim for damages for delay amounts to a waiver of such damages.
    4. Same — Officers—Authority—Contracts—Materials Furnished — Liability of City.
    A city is liable for the value of crushed stone furnished for and used in repairing its streets, though furnished in reliance upon a contract with its street commissioner and he has no authority to contract in behalf of the city.
    Error to Macomb; Tucker, J.
    Submitted October 13, 1905.
    (Docket No. 55.)
    Decided March 5, 1906.
    Assumpsit by the Central Bitulithic Paving Company against the city of Mt. Clemens upon a paving contract. There was judgment for defendant on a verdict directed by the court, and plaintiff brings error.
    Reversed.

      Clark, Jones & Bryant, for appellant.

      Bobert F. Eldredge, for appellee.
   MoAlvat, J.

Plaintiff brought suit against defendant for a balance claimed to be due upon a contract for paving a portion of a street in the city of Mt. Clemens, and for the price and value of 128 loads of crushed stone sold and delivered by plaintiff to defendant. The paving was done under a certain contract in writing between the parties. The crushed stone was sold to defendant under an oral agreement not connected with the paving contract. Defendant pleaded the general issue and gave notice, under the plea, of recoupment for damages under the contract on account of nonfulfillment by plaintiff. The following is the paving contract:

“Articles of agreement, made and entered into by and between the city of Mt. Clemens, a municipal corporation, of the first part, and the Central Bitulithic Paving Company, a corporation organized under the laws of the State of West Virginia, with its principal office at the city of Cincinnati, party of the second part,
Witnesseth: That said second party agrees to pave South Gratiot avenue, in the city of Mt. Clemens, between Cass avenue and Terry street, in accordance with the plans, details and specifications therefor prepared by the city engineer and approved by the common council of said first party and now on file in the office of the city clerk, doing all of the work and furnishing all of the material needed therefor.
“That the said second party will begin work und.er this contract on the 15th day of October, A. D. 1902, and will carry on the work hereunder continuously and with all possible speed to the end. That the said streets of the said city of Mt. Clemens shall not be closed or obstructed by the laying of said pavement any longer than may be necessary, and that they wilhcompíete the work under this contract on or before the 5th day of November, A. D. 1902.
“ It is understood, however, that in case of delays not occasioned by said party of the second part, or in case strikes, unusually heavy storms or acts of God delay the completion of said work, or in case the same shall be delayed or prevented by injunction or mandate issued by any court of record, said second party, having used all due diligence, shall have such time in addition to that above provided for, for the completion of tbe work, as they shall have been' delayed.
“ That the said second party will and do hereby guarantee their work in the paving of said street in accordance with said specifications, for a period of five years from and after the date of the acceptance of said work by the common council of said city, and will save and keep said first party harmless from all damage because of defects in their said work, and will at their own expense make all repairs to said pavement made necessary by reason of defects in their said work for a period of five years after the date of such acceptance.
“ That said first party hereby agrees to pay said second party for said pavement, when completed in accordance with said plans and specifications, the sum of. two and -jW ($2.15) dollars per square yard.
“This contract shall not effect, or have any force or validity, until said second party shall file with the city clerk of said city a bond with sufficient sureties or surety to be approved by the mayor of said city, in the penal sum of twenty-five hundred dollars, conditioned that the said second party shall in all and every respect, in the doing of said work, comply with the conditions and requirements of said plans, details and specifications and with the provisions of this contract, including the guaranty of the finished street in compliance with said contract and specifications for a period of five years from the date of its completion.
“The Central Bitulithic Paving Co.,
“By E. M. Ayers, Prest. [Seal]
“Dated the 6th day of October, A. D. 1902.
“Martin Crocker, Mayor.
“Henry C. Benton, City Clerk.”

To this contract was attached a copy of the specifica- . tions not signed by the parties.

The main contention arises over the paragraph of the specifications which provides:

“And if the contractor shall fail to complete the work within the time specified in this contract, the sum of twenty-five dollars per day for each and every day thereafter, until such completion, shall be paid the city of Mt. Clemens through its common council by the said contractor before the acceptance of the work, provided that all days on which work is suspended by written order of the common council shall be deducted from overtime, if any there be.”

Upon this branch of the case the trial judge held that the specifications were a part of the contract, and rights under this paragraph had not been waived by the city. He also held that the sale of the stone to the city had not been made through any officer or agent duly authorized. A verdict was accordingly directed in favor of defendant of no cause bf action. Upon these rulings and instructions errors are assigned.

The record shows that the work was begun in October, 1902, but was not completed at the time specified in the contract, November 5,1902. On December 15th the council, by resolution, extended the time to complete the work to April 1, 1903. A dispute having arisen between the parties, on June 1, 1903, a resolution was adopted by the council rescinding the contract and ordering the street commissioner to remove the stone, etc., from the street and put it in a passable condition. This action was reconsidered June 15, 1903, and on this date plaintiff commenced the work of completing the pavement, which was accomplished July 4th. At the council meeting July 6th, the city engineer recommended that plaintiff be allowed $4,000, as a partial payment on its contract. This was received and filed, and plaintiff’s bill was referred to the engineer, who was instructed to ascertain the actual cost of the work at the contract price, in order to determine the amount of rebate to property owners on their special assessments for this improvement which had been ordered. July 14,1903, the council directed the surveyor to deliver this schedule to the city treasurer, and also ordered the city treasurer, as soon as collected, to pay plaintiff $4,000 from such fund to apply on its contract. This amount was collected, and paid a few days later. July 24, 1903, the engineer reported in writing to a meeting of the council that he found plaintiff had completed 3,014.43 square yards of pavement, amounting at the contract price to-$6,481.02, of which $4,000 had been paid. He recommended that, until further investigation, an allowance on the entire contract at the rate of $2 per square yard be paid, which would leave on that basis a balance due plaintiff of $2,028.86, and recommended the allowance of that amount. This report was unanimously adopted, and the mayor and clerk were authorized to draw the proper warrant. This balance was promptly paid. There was a mistake of 159.80 square yards in the engineer’s estimate of the number of square yards which had been completed by plaintiff. This 159.80 yards, at $2.15 per square yard, added to 15 cents per square yard held back, amounts to $795.74, which is claimed by plaintiff to be due on the paving contract. No plans and details were attached to the contract, but it refers to them, as well as to the specifications, and provides that the paving is to be done in ac • cordance therewith. The specifications in the record show that they were drawn with the intention of being attached to and made part of the contract to which they refer. For illustration, the following clauses disclose this intention:

“ The first party shall not assign or transfer this contract or sublet any portion of the work. * * * Nor shall he give an order for the payment of any moneys upon this contract * * * except as against the net sum * * * authorized by this contract. * * *
“The work embraced in this contract shall be begun * * * and carried on * * * with such force, so as to insure its full completion within the time specified in the contract. The time of beginning, rate of progress, and time of completion being essential conditions of this contract. If the contractor shall fail to complete the work within the time specified in this contract * * *.
“ The contractor * * * shall pay * * * all indebtedness due * * * on account of any labor or material furnished in connection with this contract, of which these specifications form a part. * * * And the contractor hereby further agrees that he shall pay the city of Mt. Clemens * * * five dollars per hour for all time spent by said council in settling disputes or claims filed under this clause or these specifications which are in all respects a portion of the contract.”

Turning to the contract, we find the following recitals referring to these specifications:

“The said second party agrees to pave, * * * in accordance with the plans, details, and specifications therefor prepared by the city engineer, * * * do guarantee their work in accordance with said specifications. * * *
‘ ‘ Said first party hereby agrees to pay said second party for said pavement, when completed in accordance with said plans and specifications. * * *
“This contract shall not affect or have any force or validity until said second party shall file a bond * * * conditioned that said second party shall in every respect in the doing of said work comply with the conditions and requirements of said plans, details, and specifications, and with the provisions of this contract?’

There is no question raised as to the identity of the specifications which were attached to the contract. Such reference is made, in each of these written instruments, to the other, that neither can be understood without examination of the other. The specifications in their entirety, by the terms of the contract, became a part of it. The paragraph in dispute fixing stipulated damages was within the power of plaintiff to make, and was valid and binding upon it. The action and proceedings of the council relative to this transaction are already fully set forth and need not be repeated. By the action of July 24th, the council understood that the balance ordered to be paid was the full contract price, less 15 cents per square yard, and, but for the error of the surveyor, this would have been done. This error came about by not allowing for certain pavement laid near the street-car track which the surveyor thought was to be paid by the street-car company. This appeared upon the trial and is not disputed by the defendant.

•The trial judge held this action of the council, in adopting the surveyor’s report on July 24th, together with the payment of the money, without specific objections to the pavement, tobe an acceptance by the city of the work performed by the plaintiff, so far as the quality of the work was concerned, and its completion according to the specifications, aside from the question of liquidated damages. He also held that by this action defendant waived the right to ■ recover any greater sum than the amount remaining unpaid on the contract. We agree with the trial judge that the action referred to was an acceptance of the work performed under this contract. The specifications required the stipulated damages to be paid before the acceptance of the work performed under the contract, and, such work having been accepted without any claim or demand for damages to be paid by reason of delay in completing the same, we hold that such acceptance was a waiver of any and all stipulated damages. The trial judge erred in instructing the jury upon this question to find for the defendant.

Upon the claim of the plaintiff for crushed stone, it appears that the street commissioner, under the instructions of the street committee of the city council, went to plaintiff’s foreman for this stone, and was informed he could have it for $2.25 per load. He sent the city teams and hauled away 128 loads. This crushed stone was used by the street commissioner in repairing the streets in the city wherever needed, under the direction of the street committee of the council. The street commissioner had the general supervision and care of all the streets in the city. In his official reports to the council of his doing for the periods during which this crushed stone was used, he included it, showing the amount, from whom obtained, and the price. These reports were' filed with the city clerk. The record does not show that they were passed upon by the council. The trial judge instructed the jury that plaintiff could not recover for the crushed stone because the street commissioner had no authority to create liability against the city. This is not a claim based upon an agreement to improve the streets of the city, nor for services rendered and accepted by it. It is based upon the admitted appropriation! and use of plaintiff’s property by defendant without compensation. Such cases were recognized by Mr. Justice Field, in Argenti v. City of San Francisco, 16 Cal. 255; and, although that case was not decided upon this question, his reasoning is cogent, and applicable to this case at bar. .He says:

“That doctrine (i. e., of implied liability) applies to cases where money or other property of a party is received under such circumstances that the general law, independent of express contract, imposes the obligation, upon the city to do justice with respect to the same. * * *
“The money must have gone into her treasury or been appropriated by her, and, when it is property other than money, it must have been used by her, or be under her control.”

Such is exactly the case at bar. The fact that this property was taken, with plaintiff’s consent, at an agreed -price, cannot defeat a recovery. It is an appropriation of property under such circumstances that the general law imposes, upon the city the obligation to do justice.

We therefore hold that plaintiff is entitled to recover the value of this property, which the city has received and used in repairing its streets, and for which it has not paid, and of the receipt and user of which it had notice through its officers and the files and records of its official clerk. The court erred in instructing a verdict for defendant.

For the reasons above given the judgment is reversed,, and a new trial is ordered.

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