text:
    BATES v. CITY OF HASTINGS.
    .1. Municipal Corporations — Unauthorized Expenditure of Public Funds — Remedies—Suit by Taxpayers —Equity—Injunction.
    A taxpayer is entitled to maintain a suit to restrain the illegal action of a municipality in the expenditure of public moneys.
    _3. Same — Bill—Demurrer—Questions Considered.
    On demurrer to a bill by a taxpayer to restrain the illegal action of a municipality in the expenditure of public moneys, the court cannot consider the character of the officers of the municipality, nor the probability of their conspiring to do an •unlawful act of the character charged, but can only inquire ■whether the pleading is sufficient under the rules of law to make a case, should its allegations be supported by competent proof.
    :8. Same — Bill—Sufficiency.
    A bill by a taxpayer against the officers of a municipality alleging that defendants have conspired to issue the bonds of the municipality ostensibly for legal purposes, intending to sell them to innocent purchasers and expend the funds so raised for illegal purposes, states a case within the jurisdiction of equity, entitling complainant to relief by way of injunction to restrain the threatened expenditure.
    ,4. Same — Prematurity of Bill.
    A bill by a taxpayer against the officers of a municipality to restrain the illegal expenditure of public funds, raised by the sale of bonds issued pursuant to proceedings regular on their face, is not prematurely filed though no illegal act is shown to have been done by the defendants, since the issuance of the bonds would create a valid municipal debt which complainant could not evade, and his only remedy would be the possibility of intervention between the receipt of the money by the defendants and its disposition as contemplated.
    ;5. Same — Demurrer—Allegations Admitted — Information and Belief.
    In a bill by-a taxpayer against the officers of a municipality to restrain the illegal expenditure of public funds raised by the sale of bonds issued pursuant to proceedings regular on their f acg, an .allegation that “the bonds will be immediately issued and disposed of to innocent purchasers as your orator has good reason to believe and does believe,” is not a mere allegation of information and belief, but is an allegation of fact based on information and belief, the truth of which is admitted by demurrer.
    6. Same — Municipal Records — Parol Evidence — Impeachment.
    The rule that parol evidence will not be received to impeach the records kept by a municipal council has no application to a case in which it is alleged that by the making of false records the officers of a municipality are attempting to secure and expend public money for an unauthorized purpose.
    Appeal from Barry; Wolcott, J., presiding.
    Submitted June 6, 1906.
    (Docket No. 19.)
    Decided September 20, 1906.
    Bill by Richard M. Bates and Frank R. Pancoast against the city of Hastings and others to enjoin the illegal expenditure of public funds. From an order overruling a demurrer to the bill, defendants appeal.
    Affirmed.

      Thomas Sullivan and Fred W. Walker, for complainants.

      A. E. Kenaston, Oolgrove & Potter, and Thomas & Pryor, for defendants.
   Carpenter, C. J.

The opinion of Judge Wolcott in •disposing of this case in the lower court is so satisfactory that we adopt it as the main portion of the opinion of this court. That opinion is as follows:

“The complainants bring this suit as property owners and taxpayers in the city of Hastings. The bill charges, in effect, a conspiracy on' the part of the defendants to raise money in the city of Hastings under the guise of taxation for public purposes, but with the intent to use the same in the payment of bonuses to induce manufacturing and industrial enterprises to locate within the corporate limits of the city of Hastings.
“ The material allegations of the bill will be referred to later. It asks an injunction enjoining the defendants from conspiring and acting together to carry out the illegal scheme set forth, and from issuing any of the bonds of the city for the purpose of raising money to donate to private enterprises, and particularly that the mayor, city attorney, and city council be restrained from issuing said bonds or raising money thereby to donate to private enterprises. The bill is demurred to on the general grounds:
“ ‘ (1) That the averments of fraud and conspiracy are too general, and that the bill contains no specific averment of wrong-doing, and that no facts and circumstances from which fraud is fairly inferable are alleged.
“ ‘ (2) That the bill does not attack the regularity or validity of the proceedings in the council, but admits that on their face they are regular and in compliance with the charter and laws governing the bonding of cities; that the injury complained of rests solely in the alleged intent of the public officials to commit a wrong in the future, and is not susceptible of proof, for the reason that the motives or reasons of the legislative body inducing the passage of the act cannot be inquired into.
“‘(3) That the bill is prematurely filed.’
“1. It seems tobe conceded that tbe purposes named in the resolution passed by the council, for the raising and expenditure of money contemplated by it, are valid and proper municipal purposes; that the common council had the power to pass the resolution, and that the question of raising the money was submitted to the people in regular form at an election, and was carried. On the other hand, it is conceded that the common council had no power, under the Constitution, laws of the State, and under its charter, to raise money by taxation for other than municipal purposes; that it had no right to appropriate public money for private purposes; that it had no right to use the money from the sale of these bonds to promote private enterprises.
“ In other words, it is conceded, on the one hand, that, if the moneys raised by the sale of the bonds are used for the purposes stated in the resolution of the common council, it is a valid and proper exercise of the taxing power; and, on the other hand, that, if the moneys so raised should be appropriated to any of the purposes to which the bill alleges it is the intention to devote them, such use would be unlawful.
“ I think it is well settled in this State that a taxpayer is entitled to maintain a suit to restrain the illegal action of the municipality in the expenditure of public moneys. Savidge v. Village of Spring Lake, 112 Mich. 91; Curtenius v. Hoyt, 37 Mich. 583.
“ The demurrer admits the facts which are well pleaded in the bill, and the question on this point is a question, of pleading. Does the bill sufficiently set forth a state of faets and circumstances from which a fraudulent intent on the part of the defendants, particularly the public officials, is fairly inferable ?
“It is urged that the demurrer is aided by the presumption of honesty and proper motives on the part of the public officials. It is true that, in passing upon a disputed question of fact where fraud is charged, it is a rule of law that every man will be credited with an honest, rather than a dishonest, motive in a transaction not suspicious on its face nor surrounded by such circumstances as would fairly lead an unprejudiced mind to the conclusion that a fraud was intended. But, in passing upon the sufficiency of a pleading, the court can only inquire whether the pleading is sufficient under the rules of law to make a case, should its allegations be supported by competent proof.
“ It is suggested that it-is highly improbable that public officials, and men of the character of the defendants, would deliberately enter into an unlawful scheme to misappropriate public moneys. This, however, is a consideration more properly addressed to the court in weighing the evidence, should the case come to trial. ,The court, in this proceeding, cannot consider the character of the parties, nor the probability or improbability of their conspiring to do an unlawful áct of the character charged. The question here must depend upon the sufficiency of the bill of com'plaint.
“The bill alleges, in substance, that an organization was at one time formed among some of the citizens of Hastings to devise means to raise money to be offered as a financial inducement to industrial enterprises to locate in Hastings. This is alleged to have been a failure. None of the defendants are named as having been associated therewith, nor is the purpose of such organization claimed to have been in any sense unlawful.
The bill further alleges that thereafter certain citizens of Hastings began to advocate a plan to raise money by taxation, ostensibly for municipal purposes, but in reality for the payment of bonuses to industrial enterprises to induce them to locate in, Hastings. These citizens are not named, but it is alleged that they appealed to various members of the city council and induced them to look with favor upon the plan, and that they and other city officials ultimately entered into a conspiracy which was, in substance, to bring influence to bear through the press and otherwise upon the citizens generally to induce them to approve the plan and subsequently to vote for it, the plan as alleged being to secure a favorable vote to the citizens on a proposition to bond the city for municipal purposes and so to make it possible to lawfully issue and sell bonds, with the intent, as soon as the money was obtained, to use it for private enterprises; and it is alleged that to that end the defendants and others freely urged the citizens to vote for the bond issue, concealing the fact that such proposed use would be unlawful, but setting forth the. benefits to accrue to the city and to its inhabitants by the promotion of industrial and* manufacturing institutions.
“It is alleged that, in pursuance of such plan, the various newspapers, in confederacy with the other defendants, openly avowed that the real purpose of raising the money was to pay bonuses to industrial enterprises, factories, etc., and advocating the same on the ground that it would increase business, increase the opportunities for labor, advance the prices of property, increase the population, etc.
“ The bill further alleges that in pursuance of the same plan a commission was created, consisting of seven members, who are also named as defendants. The ostensible purpose of this commission it is alleged was to aid in carrying out the resolution of the council before referred to, to act as an advisory board with the common council in putting into effect such resolution, to the end that the money might be wisely and economically expended for the greatest good and largest benefit to each and every citizen. It is alleged, however, that the real purpose of this commission was, among other things, to approve of and to aid the illegal plan and purpose before mentioned.
“ It is alleged that a part of the plan was to have the records and resolutions of the common council so appear as to conceal the real intent, so that the bonds might be disposed of to innocent purchasers and make the same a binding obligation upon the taxpayers.
“ It is alleged that the advocacy of this illegal plan has been consistently pushed, advocated, and countenanced by the various defendants; that it is intended that the bonds shall be issued and disposed of to innocent purchasers and the money immediately placed in the hands of private individuals for the purpose of paying bonuses and financial inducements to manufacturing and industrial enterprises to locate in the city of Hastings and the money so placed beyond the reach of legal process.
“The bill alleges that the various defendants are now threatening to carry into effect this plan and are actually taking steps to consummate and complete the same. The foregoing summary of the bill does not follow its exact language in every respect, but is, I think, a fair statement of the material allegations.
“It is urged by the defendants’ counsel here that all that was done by defendants, so far as set out in the bill, was just as consistent with a lawful purpose as with an unlawful one. This is true so far as the resolutions of the council are concerned, but the bill also asserts the defendants, or some of them, have repeatedly avowed that their real purpose and intention are not to use the money for municipal purposes, but to aid private enterprises, and the bill sufficiently alleges a conspiracy or combination which, if true, would make the acts and declarations of one the acts of all.
“ If it is in fact true that the defendants have so asserted their intention — and for the purpose of this demurrer we must assume it is true — this would characterize the acts which were essential to be done as a preliminary to raising the money for any purpose.
“ The passage of the resolution to raise money for municipal purposes and its submission to the people were essential steps to secure a bond issue which would be negotiated. Standing alone these acts would be perfectly proper and would' be presumed to have been taken in good faith for the purposes indicated on their face. But it is alleged in the bill that the real purpose and intent on the part of the council and others was not to use the money for the purpose stated in the resolution, but for private enterprises; that this has been openly stated by some of the defendants, and the purpose to use it for private enterprises advocated and countenanced by all the defendants.
“ Assuming, as we must, that it is true that the defendants have declared the real purpose to be the unlawful one, this would characterize the acts of the council and constitute a sufficient statement of acts performed in furtherance of an illegal plan to sustain the bill.
“ It is true that injunctions will not issue to allay mere apprehensions of injury. - But preventive injunctions necessarily operate upon unperformed and unexecuted acts. The allegation that defendants intend to do a certain act is the allegation of a fact which may be traversed. So too is the allegation that defendants have declared or avowed their intention to do the acts in question.
“I think it must be held that the bill sufficiently alleges an intent on the part of the public officials to make an illegal appropriation of the public funds and sets out sufficient facts and declarations on the part of the defendants to sustain the bill.
“ If this is true, equity may intervene by injunction. In 2 Dillon on Municipal Corporations (4th Ed.), § 914, the author states:
“ ‘ In this country, the right of property holders or taxable inhabitants to resort to equity to restrain municipal corporations and their officers from transcending their lawful powers, or violating their legal duties in any mode which will injuriously affect the taxpayers, such as making an unauthorized appropriation of the corporate funds, * * * has, without the aid of statute provision to that effect, been affirmed or recognized in many of the States. It is the prevailing, we may now add, almost universal, doctrine on this subject.’
Mechem on Public Offices and Officers, § 996, says:
“ ‘ So the writ [injunction] will be granted to prevent public officers, having the matter in charge, from making illegal expenditures or appropriations of the public funds, or from levying an unjust or unlawful tax.’
“ In 1 High on Injunctions, § 500, the author states the rule thus:
“ ‘Fraud has been held a sufficient ground to warrant a court of equity in a departure from the general rule of noninterference with the collection of taxes. And an allegation of fraud in .the levying of a tax for an unauthorized purpose is regarded as sufficient to give a court of equity jurisdiction.’
“ This State has recognized this ground of equitable jurisdiction. Curtenius v. Hoyt, 37 Mich. 583; Callam v. City of Saginaw, 50 Mich. 7; Putnam v. City of Grand Rapids, 58 Mich. 416; Savidge v. Village of Spring Lake, 112 Mich. 91; Bristol v. Johnson, 34 Mich. 123.
“2. It is urged by counsel for defendants that, so long as the members of the common council act within the scope of their authority, their motives and intentions cannot be inquired into nor questioned by judicial process. This principle is stated in Cooley on Constitutional Limitations (6th Ed.), p. 221, as follows:
“ Although it has some times been urged at the bar that the courts ought to inquire into the motives of the legislature where fraud and corruption were alleged, and annul their action if the allegation were established, the argument has in no case been acceded to by the judiciary, and they have never allowed the inquiry to be entered upon.’
“ In Angle v. Railway Op., 151 U. S. 18, it is said:
“ ‘ The rule, briefly stated, is that whenever an act of the legislature is challenged in court, the inquiry is limited to the question of power, and does not extend to the matter of expediency, the motives of the legislators, or the reasons which were spread before them to induce the passage of the act. This principle rests upon the independence of the legislature as one of the co-ordinate departments of the government. It would not be seemly for either of the three departments to be instituting an inquiry as to whether another acted wisely, intelligently, or corruptly.’
“ There is no question but what it is a well-settled rule of law that the judicial power cannot interfere with the legitimate discretion of any other department of government, unless it is acting beyond its legal discretion. The legislature is a co-ordinate department of government, and it is not for one branch of the government to inquire whether the other has acted wisely or corruptly. It is not, however, the purpose, or intention, or motive, of the council in enacting any legislation within its legal discretion which is brought in question here. But this proceeding is brought to restrain an act outside'its legal discretion. If these bonds are negotiated, and the moneys used for the municipal purposes set forth in the resolution, the court cannot inquire whether it was wisely or foolishly expended, or whether the members of the council were actuated in so doing by proper or improper motives; but the court in this case is only asked to restrain an act which it is alleged the council threatens and intends to do, and which it is conceded would be illegal and beyond its power and entirely outside of any legal discretion committed to it.
“The court is not asked to set aside or nullify any action already taken by the council, nor to interfere with any legal discretion which the council may hereafter take. It is simply asked to restrain an act which it is admitted would be beyond the power and authority of the council to take. The court is asked to restrain the doing of what would be entirely outside the exercise of any legal discretion rested in the council, namely, the ‘ using of said bonds or the raising of money to donate to private enterprises.’
“3. It is said by defendants’ counsel, however, that this bill is prematurely filed; that no illegal act is shown to have yet been done by the common council or by any of the defendants. T think it would be admitted that, if the council should pass and place upon its records a resolution that this money so raised by taxation be expended to promote private enterprises, no one would question the power of the court, on a proper application, to enjoin such illegal appropriation. I see no reason why a court, on a sufficient showing that such action is contemplated and threatened, may not restrain it at any point.
“ In this case the proceedings of the council and the vote of the citizens authorizing the bonds are admitted to have been regular — at least, no irregularity is pointed out. It may be presumed that the bonds which the bill alleges are about to be issued by the proper city authorities, will be valid on their face, and may be disposed, of to innocent purchasers.
Such bonds, in the hands of innocent holders without notice, are collectible, and the city must pay them. Common Council of Cedar Springs v. Schick, 81 Mich. 405 (8 L. R. A. 851); Township of Grant v. Township of Reno, 107 Mich. 409; Thompson v. Village of Mecosta, 127 Mich. 522; Schmid v. Village of Frankfort, 131 Mich. 200.
‘ ‘ The bill alleges that the bonds are about to be issued and negotiated. As soon as this is done a municipal debt is created, and the complainants cannot evade taxation to pay for the same.
In Curtenius v. Hoyt, 37 Mich. 583, the court enjoined, at the suit of a taxpayer, the emission of railroad aid bonds. In that case the court say:
“ ‘ In the case before us the town authorities had actually proceeded down to 'the last step in the course of unlawful action intended to create a heavy municipal debt and cause it to be necessary to make large demands on the taxpayers, and nothing remained but the emission of the negotiable evidences of that debt, and the commencement of that act was almost, if not quite, entered upon. If the bonds were once put afloat, the consequence to taxpayers generally, and especially to holders of real estate, could not be otherwise than serious. The unlawful act would necessarily work direct and immediate, as well as indirect and mediate injury to complainant. It would operate to depress the value of real property and discourage purchasers and. threaten a large increase of future public charges, and the chance to avoid the bonds and escape the taxation needful for their payment would be generally esteemed as very uncertain and precarious. The danger was threatened, was imminent, was actually at the door, and my associates think it was competent for complainant to intervene and ask the court to stay the further progress of unlawful action by the board and enjoin the final act about to be performed.’
“ The situation in the case at bar is the same if, in fact, the money derived from the sale of the bonds is to be appropriated to private purposes as charged in the bill of complaint. If these bonds were once negotiated, and a debt against the city created, it is too late for the taxpayer to be protected, unless he could possibly intervene between the receipt of the money by the city authorities and its disposition as it is charged in the bill of complaint is contemplated. The court is not asked to enjoin the sale or negotiation of the bonds, nor the use of the proceeds, for any of the purposes contemplated by the language of the resolution.
“ I am of the opinion that, taking as true the allegations of the bill of complaint, the injunction asked is timely, and is not premature. It is true in this case that the sustaining of the bill or a temporary restraining order will work no hardship to defendants, nor impede the work of the common council, nor delay any municipal improvement ; for the bill seeks to restrain nothing except what defendants admit would be entirely unlawful. The court, however, does not place the decision on that ground, for a court cannot entertain an injunction bill simply because no material injury would accrue to defendants by the injunction ; but, on the contrary, the court requires in all cases a sufficient showing to be made of threatened injury entitling the complainant to equitable relief. I think such a case has been shown here by the bill of complaint.”

There is little for this court to add to the foregoing opinion of Judge Wolcott. It is only necessary to consider two arguments apparently not advanced in the circuit court. It was alleged in the bill that the “ bonds of the city will be immediately issued and disposed of to innocent purchasers as your orators have good reasons to believe and do believe.” It is urged by defendants that their demurrer does not admit the truth of this fact charged, but only complainants’ belief of that fact. In support of this contention they cite authorities which assert that a demurrer does not admit facts alleged upon information and belief. All these authorities are based upon the decision of Trimble v. American Sugar Refining Co., 61 N. J. Eq. 340. In that case it was said:

‘ ‘ The other allegations of the bill are based upon information and belief, and the defendant argues that an admission of the complainant’s information and belief on that subject is not an admission of the fact so stated. In this I think it is substantially sustained by authority.”

The court was quite right in saying that there was abundant authority for the proposition that an admission of complainant’s information and belief respecting a fact is not an admission of the fact, but it was not justified in applying this principle, as it apparently did,, to an allegation of fact based upon information and belief. The distinction has often been drawn between an allegation of fact based upon information and belief (as “your orators further show that the bonds of the city will be immediately issued and disposed of to innocent purchasers, as your orators are informed and.believe”) and a mere allegation of information and belief (as ‘ ‘ your orator is informed and believes that the bonds will be immediately issued,” etc.), and it has been held that a demurrer to the former admits the fact alleged (see Coryell v. Klehm, 157 Ill. 476; Lucas v. Oliver, 34 Ala. 626; Wells v. Hydraulic Co., 30 Conn. 323), while a demurrer to the latter admits only complainant’s confidence in the truth of the information (see Jones v. Cowles, 26 Ala. 614; Egremont v. Cowell, 5 Beavan, 620). (Our reference to the latter cases is not to be understood as an expression of approval.) It would seem that in Trimble v. American Sugar Refining Co., supra, the court overlooked this distinction and applied to an averment of fact based on information and belief the law applicable to an averment of information and belief: We decline to follow that decision and hold the demurrer in this case admitted the fact alleged.

The record kept by defendants shows their purpose to be a lawful one, and defendants contend that complainants cannot prove this purpose to be unlawful without' violating the rule which forbids the introduction of parol testimony to impeach the records kept by a municipal council. The rule referred to applies when the act under consideration must be evidenced by a municipal record, and when a court is determining the meaning of a municipal record (see Stevenson v. Bay City, 26 Mich. 44; Moser v. White, 29 Mich. 59); but it has no application to the case at bar: The question the court is called upon to determine in this case is this: Are municipal agents exceeding their authority ? This, as already shown, depends upon their purpose. Evidence which tends to establish that purpose is admissible, though it is not found in, or is inconsistent with, their records. If it were otherwise, municipal agents could exceed their authority whenever they chose to make false records. In other words, they could exceed their authority with impunity.

The order of the circuit court overruling the demurrer is affirmed.

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


source: Caselaw Access Project

author: Carpenter, C. J.

license: Public Domain

text:
    JOHNSON v. JOHNSON.
    Í. Intoxicating Liquors — Civil-Damage Law — Right of Action.
    The daughter of one who dies from the effects of intoxication has no action under section 5398, 2 Comp. Laws, against a saloonkeeper who furnished liquors to the decedent which in no wise contributed to the intoxication which caused his death, nor to any damage sustained by the daughter.
    2. Damages — Exemplary Damages —Instructions — Harmless Error.
    Plaintiff is not prejudiced by errors in the charge on the subject of exemplary damages, where the jury, under proper instructions as to the subject-matter of the action, find a verdict for the defendant.
    Error to Luce; Streeter, J.
    Submitted June 6, 1906.
    (Docket No. 28.)
    Decided September 20, 1906.
    Case by Mary Johnson, by next friend, against Edward Johnson, a saloon keeper, and his bondsmen, under the-civil-damage act. There was judgment for defendants,, and plaintiff brings error.
    Affirmed.

      James J. Brown, for appellant.

      Louis H. Bead (Henry Hoffman, of counsel), for appellees,
   Carpenter, C. J.

Plaintiff brings this suit to obtain compensation for the death of her father, Charles Johnson, which she alleges resulted in part from liquor furnished him by defendant Edward Johnson. Olaf Johnson and Matt Surrell are joined as defendants because they are sureties on the bond given by said Edward. The cause was tried before Circuit Judge Steere and a jury. The testimony showed that on the 7th of April, 1904, said Charles Johnson, who had been on a protracted drunken spree at St. Ignace, visited Newberry, at which place all the parties to this suit reside. There he became a guest at the hotel kept by said Edward Johnson, and remained such until his death — occasioned by the-excessive use of liquor — April 17,1904. During this time he had from the employes at the hotel one drink of whisky at the bar (this was on the 8th of April), and three drinks of hot whisky each day from April 14th until he died. This hot whisky was furnished at the direction of the physician attending him during his last illness. There was evidence tending to prove that the liquor furnished by said Edward Johnson did. not contribute to the intoxication which caused the death, nor to any damage sustained by plaintiff. The issue was submitted to a jury who rendered a verdict for the defendants.

Nearly all the grounds upon which plaintiff asks us to reverse the judgment entered on said verdict are based upon the assumption that defendants are liable, though the liquor furnished by said Edward Johnson did not contribute to plaintiff’s damage. This assumption is unfounded. The law (section 5398, 2 Comp. Laws) gives plaintiff a ‘ ‘ right of action ” when and only when she has been “injured in person or property or means of support, or otherwise.”

Plaintiff also complains because the trial court did not give her requests touching the question of exemplary damages. It is a sufficient answer to this complaint to say that plaintiff was not prejudiced by this refusal. The jury, having found under proper instructions that plaintiff was entitled to no damages, could have had no occasion to consider the question of exemplary damages. No other complaint demands discussion.

The judgment is affirmed.

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


author: McAlvay, J.

text:
    LYON v. LINDBLAD.
    1. Sales — Fraud—Rescission.
    Where a sale of jewelry is induced by frgud and misrepresentation in regard to the quality and character of the goods, the buyer has a right to rescind and tender back the goods without exhausting the remedy provided for exchange thereof in the contract.
    2. Same — Action for Price — Rescission op Contract — Burden of Proof.
    Where, in an action for the price of goods sold, the buyer claims that the contract has been rescinded on the ground of fraud in its inception, the burden is upon him to show the fraud claimed.
    3. Same — Caveat Emptor.
    Where the buyer of certain jewelry for resale was unskilled in the jewelry business, and relied upon the statements of the seller as to the character and value of the goods, the rule of caveat emptor does not apply.
    4. Same — Rescission.
    Where the buyer of certain jewelry was defrauded in the sale thereof, his oiler to return the goods, followed by a tender of . the same in court when sued for their price, operates as a rescission of the contract.
    5. Same — Rights of Seller.
    Where the buyer of goods for resale rescinds the contract for fraud in its inception, and returns such part of the goods as have not been resold, the seller is entitled to recover the price of the goods not returned. ‘
    Error to Delta; Stone, J.
    Submitted June 7, 1906.
    (Docket No. 29.)
    Decided September 20, 1906.
    Assumpsit by Louis E. Lyon and Milbert E. Price, copartners as the Lyon-Taylor Company, against Peter J. Lindblad for goods sold and delivered. There was judgment for plaintiffs for less than the amount claimed, and they bring error.
    Affirmed.

      A. H. Ryall and R. P. Howell, for appellants.
    G. R. Empson, for appellee.
   McAlvay, J.

Plaintiffs brought an action in assumpsit for the price and value of certain jewelry sold to defendant under a written agreement, for the sum of $324, claiming a balance due of $243. < This sale was negotiated by an agent of plaintiffs, and at the time of making the contracts, and when the goods were received, certain printed literature relative to the character and quality of the goods was furnished defendant. A promissory note for $81 was given by defendant for one quarter of the purchase price. The date of this note does not appear from the record, and it is immaterial for the reason that nothing was claimed for it by plaintiff. With the general issue pleaded" by defendant, notice of several defenses was given, one of which was that he was a grocer unacquainted with the jewelry business, and ignorant of the value and quality of the articles sold; that he was induced to enter into this contract, by reason of false and fraudulent representations as to the character, value, and quality of said goods; that said goods were good, merchantable, and durable, made at the time by plaintiffs’ agent, and upon which defendant relied, and by which he was induced to sign the agreement; that the goods delivered were of very poor quality and worthless to him; that as soon as he learned this he tendered the goods to plaintiffs. He refused to give notes for the balance, as provided in the contract, and claimed he notified them to get the goods. On the trial he tendered all the goods remaining to plaintiffs in court. He had sold to the amount of $60.55, and Within a month of these sales $24.80 worth of the goods were returned. Defendant was permitted to, and did, offer proof tending to support the defense above outlined,, subject to plaintiffs’ objection. At the close of the case, plaintiffs moved the court to instruct a verdict for them, which was refused. A verdict was returned in favor of plaintiffs for $38.15, for which amount judgment was entered with costs to defendant.

Plaintiffs have assigned error upon the refusal of the court to instruct a verdict, as requested; upon the allowance by the court in evidence of testimony in support of the defense of fraud and misrepresentation; and upon certain portions of the charge of the court. It is claimed ,by plaintiffs that the defense relied upon was not available •to defendant until he exhausted the terms of the wárranty .and exchange provided in the contract. The contract is .of considerable length, and to publish it at length would be of no value to the profession. It has headlines describing plaintiffs as “Manufacturers,” “High Grade .Jewelry” “NewYork,ChicagoandSt.Louis.” “Largest Jewelry Factory in the United States.” The portion referred to provides:

“ The purchaser hereby agrees, not to claim failure of consideration or goods not according to order unless he has exhausted the terms of the following warranty and exchange obligation.
“Warranty and Exchange Obligation. Any jewelry in this assortment failing to wear satisfactorily will be replaced by a new article free of charge if returned to us within five years. After settlement of account any article not selling readily can be exchanged for different ¡styles of patterns or other articles in this assortment for one year from date of invoice.”

At the time this objection was made the court said:

“ I think that is material. The proposition is that- the goods were not up to the warranty, and that there was fraud in the sale; that the representations made in writing here were false and fraudulent; that the goods supplied were inferior, and it would be competent to show that this man relied on the representations of the plaintiffs and their agent' and if it is true, it would be competent to show that he was not himself acquainted with that class of goods. * * *
“ Very well. -.On one branch of the case that is all right as far as the warranty is concerned. On the question of fraud alleged in the notice, it would be competent to show the facts and exhibit the articles whether they have ever been returned or not.-'”

The record shows that defendant was in the grocery business; that he had no acquaintance with jewelry, or the jewelry business; and that he relied upon the representations made, and believed them to be true. From an examination of the exhibits showing the false representations claimed to have been made, and upon which defend.ant relied, we find that they were to the effect that plaintiffs were the largest manufacturers of jewelry in the world; that they sold honest high-grade jewelry, comprising everything to be found in a first class jewelry department ; that they guaranteed any article manufactured and sold by them to give satisfaction, and warranted them for five years. The evidence to show fraud and misrepresentations in the sale was properly received, as was also the evidence tending to show the character and quality of the goods by expert witnesses. The expert testimony of experienced jewelers not disputed was to the effect that •these goods were the kind sold by street fakirs and such as a jeweler would not sell at all.

The court charged the jury:

“The plaintiffs ought to recover the amount claimed by them, unless the defendant has overcome this affirmative claim of the plaintiffs by evidence here of fraud. * * * The burden is upon the defendant to show that there was fraud in this transaction. The defendant claims, .substantially, that he was ignorant of this business, being a .grocer; that he relied upon these representations made by •the plaintiffs which are here in print before you, and that, .relying upon that fact, he sighed this order; but that the •goods furnished him were very inferior in quality and character. Was there fraud here, gentlemen, on the part of the plaintiffs in the sale of these goods ? Were these goods practically worthless, from inferior quality and value ? That I submit to you as a question of fact. Now it has been held by the courts that when a purchaser expressly relies upon the knowledge of the seller as to quality or value the seller is bound to act honorably and deal fairly with the purchaser. When confidence is reposed in him he is bound not to abuse it, and the rule, ‘ Let the purchaser beware’ does not apply in such a case. * * * .And I say to you that the defendant could not be benefited here by the defense of relying on a breach of contract because he has not returned all these articles which he claims have proved defective. But that is not the defense upon which the defendant relies here. He relies upon the defense of fraud.”

The court further charged that if the jury found that defendant had been defrauded in the sale and that his offer to return the goods, followed by the tender of the same in court, operated as a repudiation of the contract on his part, then the jury should find for the plaintiffs for the amount of the balance in his hands for goods sold by him; that unless the defendant had shown by a preponderance of the evidence that fraud as claimed had been practiced upon him, then they should find for the plaintiffs for the full amount claimed. The learned circuit judge stated the law of the case correctly. Picard v. McCormick, 11 Mich. 68, 74, cited and approved in Kost v. Bender, 25 Mich. 522; Ochsenkehl v. Jeffers, 32 Mich. 482; Maxted v. Fowler, 94 Mich. 109; Peck v. Jenison, 99 Mich. 329. This disposition of the important question in the case makes the discussion of other questions raised unnecessary.

The judgment of the circuit court is affirmed.

Carpenter, C. J., and Grant, Hooker, and Moore, JJ., concurred.


author: Blair, J.

text:
    SMITH v. NIXON.
    1. Pledges — Conditional Sales — Character of Transaction —Question for Jury.
    In an action by an indorser against the maker on a promissory note, evidence examined, and held,-that whether a transfer of stock from defendant to plaintiff at the time of indorsing the note was a conditional sale thereof, or a pledge to secure payment of the note, was a question for the jury.
    2. Justices of the Peace — Pleadings — Notice of Special Defense.
    A notice of special defense, filed with the plea in justice’s court, which contains, in substance, á statement of the facts upon which defendant relies in circuit court, is properly held sufficient in circuit court, irrespective whether it conforms strictly to the rules of pleading.
    3. Trial — Instructions—Bequests.
    It is not error to refuse requested instructions which are either covered or obviated by the general charge.
    4. Principal and Surety — Agreements Inter Se — Instructions.
    Where, in an action by the indorser against the maker on a promissory note, the defendant claims to have transferred stock to plaintiff in payment of the obligation, and that plaintiff agreed if he sold the stock to pay defendant the excess received over the amount of the note, it is error to charge that, if plaintiff failed, through negligence, to realize on the stock, he cannot recover.
    5. Evidence — Admissibility—Character qf Parties.
    In an action on a promissory note it is improper to receive evidence of other alleged fraudulent dealings on the part of plaintiff not connected with the transaction in issue. ’
    Error to Hillsdale; Chester, J.
    Submitted June 8 1906.
    (Docket No. 71.)
    Decided September 20, 1906.
    Assumpsit by George N. Smith against Byron A. Nixon on a promissory note. There was judgment for defendant, and plaintiff brings error.
    Reversed.

      F. M. Hall, for appellant.

      Frankhauser & Cornell and Merton Fitzpatrick, for appellee.
   Blair, J.

Plaintiff brought this suit to recover the amount paid by him to the First National Bank of Hills-dale in discharge of a promissory note for $200 given to the cashier of the bank, signed by Byron A. Nixon, George N. Smith, and A. B. Cummins. The money obtained by means of this note was received by Nixon, who, as to the other signers, was the maker of the note. At the time of making the note, Nixon delivered to Smith and Cummins 50 shares of stock of a corporation of which Smith was president and Cummins was secretary and treasurer, and the precise character of this transfer presents the important question of fact in the case and determines the legal rights of the parties. The plaintiff testified that the stock was deposited with Cummins and himself as a collateral security merely, without any indorsement of the certificate or written assignment. The defendant’s testimony is not entirely consistent. Both parties agree that the stock, at the time of giving the note, was worth 75 cents on the dollar. Defendant says that he required $200 to meet an obligation, and, for the purpose of raising the money, offered his stock for sale and had received an offer of $300. Cummins and Smith, who owned the majority of the stock of the company, learning of this,, and because of the influence such sale might have upon the value of their stock, requested defendant not to sell and— ¡

“Mr. Smith says, I will make arrangements at the First National Bank to give note for 90 days and we will take your stock and give you 90 days to redeem it, if you prefer to, or if they should keep the stock and dispose of it, they would give me a share of the difference, whatever it sold for.”

That upon this understanding the note was signed, and thereupon Mr. Smith drew up a paper stating that, ‘ ‘ if this note was not paid in 90 days or at maturity of note, Geo. N. Smith should hold the stock as his without any further ceremony.” This paper was signed by Nixon and delivered with the certificate of stock to Smith.

‘‘ I only needed at that time $200. .It is a fact that I didn’t want to sacrifice this stock and sell it for $300 when the market value of it was $375. I didn’t think I was going to sacrifice it. . I supposed they were men of their word and would pay me the difference when they transferred or sold it. I gave this stock to Mr. Smith to -secure him for signing this note. I let him have it for $200.”

The note was not paid when due, but was renewed; defendant testifying that he signed it again because—

“They told me they would rather not appear to be makers of the note, but were willing to secure it, and then the note was renewed. It was for an extension to them for an accommodation. * * *
Q. In other words, you just handed over this $100, or $175, in this certificate and never said one word about it?
A. Well, I didn’t suppose they had sold the stock yet, I took their word that when they did sell it—
‘ ‘ Q. Oh, they were to sell this stock, was that it ?
A. Well, if they did sell it, they was going to divide with me whatever they got for it — the difference between the $200 and what they got. * * * I supposed they would do as they agreed to do. * * *
Q. Mr. Smith was to take this stock and it was to be his in case you didn’t pay it in a certain time ?
“A. In case I didn’t pay it in 90 days, it was to become his by written paper.
Q. Well, now on top of that, what did they say about selling the stock and dividing with you ?
“A. They said if I would turn it over to them that they would pay me the difference when they made a sale of it.”

Defendant’s counsel claimed that the transaction, as disclosed by defendant’s proofs, was a conditional sale, and the court properly submitted to the jury the question • whether there was a conditional sale of the stock to plaintiff, as claimed by defendant, or a pledge thereof, as claimed by plaintiff. Buffington v. Ulen, 7 Bush (Ky.), 231; Gurney v. Collins, 64 Mich. 458; Abbott v. Gruner, 121 Mich. 140.

It is claimed, however, that the defense of a conditional sale was not open under the notice annexed to the plea, which notice, it is alleged, is really a notice of recoupment. The notice was filed with the plea in justice’s court where the case was first tried and contains, in substance, a statement of the facts upon which defendant relied in the circuit court. In view of the liberal construction applied to pleadings in justice’s court, and the fact that it fairly apprised the plaintiff of the facts to be relied on, we think the circuit judge did' not err in holding the notice sufficient to authorize the defense relied upon.

Plaintiff assigns error upon'the refusal of the court to give his requests to charge from the second to the eighth, inclusive. These requests, so far as proper to be given, were either covered or obviated by the following charge, which was certainly as favorable as plaintiff was entitled to, viz.:

“Then, gentlemen, you are instructed that if you find from the evidence in this case that this Hillsdale Manufacturing stock was deposited with Mr. Smith as collateral security merely, and that the title to it remained in the defendant, Mr. Nixon, then the plaintiff is entitled to recover in this case.
“ I do not think under the law in this case, if you find this. to be deposited merely as security, that Mr. Smith was under any obligation to foreclose that security or to realize on the stock or take any steps toward converting it into cash or its equivalent. And if you find this to be the situation — that is, if you find that Mr. Smith’s story and his claim of this transaction is the correct one — then you will find for the plaintiff in the sum of whatever you find this claim amounts to, and in determining that amount, gentlemen, you would figure interest on the amount of this second note when it matured at the bank at 7 per cent, straightaway from that time until this, and that would be the amount that the plaintiff would be entitled to recover.
“ On the other hand, gentlemen, you are instructed that if Mr. Smith received this stock according to the claim of Mr. Nixon — that is, that the stock, the title to the stock passed to Mr. Smith with the privilege to Mr. Nixon to pay the note within 90 days and then have the stock back, and Mr. Nixon failed to pay this note, and it was then to become the property of Mr. Smith, and the stock was not left with Mr. Smith as security merely — then the plaintiff cannot recover in this case.
“To state it differently, if you find that Mr. Smith received this stock as a sale to him on condition that the defendant pay this note within a given time and if he (defendant) failed so to do that the stock became that of Mr. Smith, and that Mr. Smith and Mr. Nixon both understood that this was the arrangement, then the plaintiff could not recover.” '

Plaintiff further assigns error upon the giving of the following instruction to the jury:

“ There has been some claim here in the evidence on the part of the defendant that Mr. Smith was to take this stock under the circumstances detailed by the defendant, and, if the defendant failed to pay this debt, then the stock should become Mr. Smith’s, and Mr. Smith should have the right to sell it and take his pay out of it and return the balance, if any, to Mr. Nixon. If you find that this was the arrangement that was made, then it became Mr. Smith’s duty, acting as a reasonably cautious and prudent business man would under like circumstances, to sell this stock within a reasonable time and so apply the proceeds on this note and give the balance, if any, to Mr. Nixon. And if under such an arrangement Mr. Smith failed to realize on the stock by his own fault and negligence — that is, he not exercising that care and caution that would be exercised by the ordinarily careful and prudent business man under like circumstances — then he cannot recover in this action.”

We think this assignment is well founded. The arrangement, as stated by the defendant, did not contemplate any obligation on the part of the plaintiff to sell the stock. He was at liberty to hold it, if he saw fit. It was only in the event that he did sell it that he was to divide with the defendant. This arrangement was hot part of the written agreement, and it is a fair inference from defendant’s testimony that he did not rely upon it as a binding obligation, but merely as a moral obligation. If this arrangement were a part of the legal agreement, it would invalidate defendant’s claim of a conditional sale.

In view of a new trial, we think it proper to suggest that testimony of other alleged fraudulent dealings of the plaintiff not connected with this transaction should not be received in evidence. There are no other assignments of error which require discussion.

For the error above referred to, the judgment is reversed.

Carpenter, O. J., and McAlvay, Grant, and Moore, JJ., concurred.


author: Moore, J.

text:
    MESTLER v. JEFFRIES.
    1. Vendor and Purchaser — Remedies of Purchaser — Action for Price Paid — Evidence.
    Where, in. an action for payments made on the purchase price of a fruit farm abandoned because of fraud in the sale, the declaration does not state that there were not as many trees as represented, evidence tending to show that there were not as many trees as represented is inadmissible.
    2. Brokers — Real Estate — Representations — Authority of Broker.
    Where a farm was listed with a broker for sale, who in turn listed it with another broker, who made certain representations in regard to the farm, and there is evidence tending to show authority to make the representations, the court should not charge that the seller is bound by the representations, but should leave to the jury as a question of fact the question whether there was an agency.

      3. Vendor and Purchaser — Fraud — Recovery of Purchase Price — Rescission.
    Where the purchaser of a farm discovered the fraud practiced upon him in its sale soon after taking possession, but retained possession for nearly a year, and made his payments as provided by his contract, he was not entitled to then rescind the contract and recover the full amount of his payments on the purchase price.
    Error to Van Buren; Carr, J.
    Submitted January 30, 1906.
    (Docket No. 74.)
    Decided September 20, 1906.
    Assumpsit by Charles Mestler against Roberson Jeffries to recover payments made on a contract for the sale of land rescinded on the ground of fraud. There was judgment for plaintiff, and defendant brings error.
    Reversed.

      Anderson & Warner, for appellant.

      Thomas J. Cavanaugh, for appellee.
   Moore, J.

On or about the 1st of April, 1904, plaintiff purchased from defendant a fruit farm, and soon thereafter went into possession of it. It is his claim that fraudulent statements upon which he relied were made to him. He abandoned the farm in April, 1905, and commenced this action. Upon the theory that he had rescinded the contract, the jury rendered a verdict in his favor for the full amount of the payments made by him. The case is brought here by writ of error.

It is said the court erred in allowing testimony that there were not as many trees upon the farm as was represented by defendant. The only reference to the number of trees in the declaration is in the first count. It there averred that representations as to the number of various kinds of trees were made stating the numbers and kinds. It is not stated therein that there were not as many as were represented, nor is it stated that reliance was placed upon this representation. We think the testimony was improperly admitted.

The record discloses that the farm was listed with real estate agents at Mattawan, who in turn listed it with a Chicago agency through whom the plaintiff’s connection with the transaction was brought about. The Chicago agency furnished a written memorandum to plaintiff. This was received in evidence. The defendant denied the authority of these agents to make the statement. There was testimony tending to show authority. The trial judge instructed the jury that defendant was bound by these statements. "We think the jury should have been instructed that if they found the agency existed then the defendant would be bound; but in view of the testimony, whether the agency did exist was a question of fact to be submitted to the jury.

The important question in the case is whether it should have been submitted to the jury upon the theory that plaintiff had rescinded the contract because of fraud, and, if so, that he was entitled to recover all he had paid on the purchase price.

The following special findings were submitted to the jury on the part of the plaintiff and answered:

“ 1. Did Mr. Jeffries, by his acts and conduct after Mr. Mestler discovered the fraud, induce him to keep possession of the lands and to make the payments indorsed on the contract ?
“A. Yes.
“2. After the fraud was discovered, were the parties negotiating a settlement of their differences up to about the time the contract was rescinded by the plaintiff ?
“A. Yes.”

On behalf of the defendant:

First. Did Mr. Mestler know of the defects of which he now complains on October 1, 1904 ?
“A. Yes.
“Second. Did Mr. Mestler, with knowledge of the matters of which he now complains, continue to make payments on the contract of purchase, and to treat t.hif¡ land as his own ?
“A. Yes.
Third. Did the letter of January 3, 1905, written by Mr. J effries to Mr. Mestler, refer to the original contract for the sale of the farm ?
“A. Yes.
Fourth. Did Mr. Mestler, after receiving this letter of January 3, 1905, make the January, 1905, payment called for by the original contract of purchase ?
“A. Yes.”

It is clear from the record that as early as in September, 1904, the plaintiff learned what he claims constituted the fraud perpetrated upon him. Did he rescind the contract then ? He admits he did not, but claims because of what occurred he was under no obligations to do so. It becomes important, then, to inquire what was done. A payment was made when the contract was made, and by its terms $40 was to be paid monthly thereafter. Plaintiff testified, and he is corroborated by his wife, that after he had learned the facts which he claims showed the fraud, in September, 1904, the defendant came to him and wanted some money; that he called his attention to the situation, and told him something had got to be done; that he would have to make a settlement in some way; that defendant told him he would make it all right.

“ That was the understanding that I left him with, that he would do something about it to make it satisfactory to both.”

He and his wife went to see defendant October 1st; plaintiff’s testimony is:

“I told Mr. Jeffries I had come over to make a settlement with him. I told him I had not made near the money on the place he said I would; I practically had not made anything on my debt and I told Mr. Jeffries that I had harvested the fruit, and I did not see where the money is coming from. I said, ‘I cannot see my way clear; I have hardly got money enough to bring my family back to the city, and pay my board so as to get started to work again. There has got to be something done about this thing. You agreed to fix this all right. I want you to cut the payments down. I consider what I paid for that place is too much, and I want a reduction on the place; if I cannot have that I will have to do something else about it, that was the understanding.’ He told me that he did not consider that he was to blame for the condition of the fruit. Jeffries said if I kept the payments up until January, he would fix it all right with me.”

After this conversation he continued to make the payments monthly. On the second of January, 1905, he wrote defendant as follows:

“Dear Sir: Ever since my visit to your home last fall, Oct. 1st, 1904, I have been thinking the matter over and over, of how I have been deceived into buying your place. * * * If I had known the peach trees and the vineyards were in the condition they were I would not have them for half the price paid, as I based my hopes on the fruit paying for the place, and after my harvest was over I find, after paying my help, I have saved off from the place $35.00 and I went to you and told you how I stood. You merely passed it off in a .light way. Of course, I did not expect anything different from you under the circumstances. I asked you if you would cut the payments down, and you said you were figuring on the money got of me to pay another debt until January. So January is here and I have paid each month, as I agreed, so you could meet your debts, and now I must ask you to consider me a little. * * * I have been to see an attorney, and he had me explain the whole deal and I showed the correspondence passed between us and told him all. And he said I was very foolish to bother with such a place as he owns 2 such, and he said a place in that condition was worthless, and he told me I would not have any trouble getting every cent I paid on the place back. I realize the cost of such controversy although he agreed to do or collect the money for 10 per cent. Such an ordeal would only cause hard feelings all around. I have a proposition to make to you in which it would be satisfactory to me. I will pay the January payment, and that will make $510 up to January and then I would like to have you wait until fall when the grapes are off on the market. I will of saved and be able to make up the difference. I am as anxious to pay for the place as you are to get your money for the place. I hope you will see the situation in the right light and accommodate me as I will assure you I am not able to work the farm this summer unless I can make such arrangement as I will have to hire a man as I intend to hold my position until I get $1,000 paid on the place. I figure I will be able to pay $1,000 a year from this spring if nothing happens and then I would go and work the' place myself as my wife does not care to stay alone unless I am there. I hope you will not be offended at this letter, but the situation demands something be done. Of course, if you can not see fit to compromise I will have to do something else. Please let me know as soon as possible as I will not send the January payment until I hear from you.”

On the third of January the defendant replied as follows:

“Oshtemo, Mich. Jan. 3, 1905.
“Mr. Mestler,
_ “ Chicago, 111.
_ “ Dear Sir: Yours of January 2nd received, contents noted. In answer will say, entered contract with you to sell my farm. Am ready on my part to fulfill the contract to the letter. Shall expect the same of you.
“Yours respectfully,
“Roberson Jeffries.”

About the middle of the month plaintiff sent the $40, and defendant sent him a receipt reading as follows:

“$40.00 _ Jan. 17, 1905.
_ “Received of Mr. Charles Mestler forty dollars to apply on land contract.
“Roberson Jeffries.”

Other correspondence followed. No settlement was arrived at and, as before stated, in the early part of April, 1905, plaintiff abandoned the farm, and commenced this suit.

It is but just to say the defendant gives an entirely different version of the transaction. The law in relation to the rescission of contracts on the ground of fraud has been declared many times in this court. It is to the effect that a party intending to rescind a contract because of fraud must be prompt in communicating the fraud when discovered, and consistent in his notice to the opposite party of the use he intends to make of it. Jones v. Disbrow, Har. Ch. (Mich.) 102; Street v. Dow, Har. Ch. (Mich.) 427; Galloway v. Holmes, 1 Doug. (Mich.) 330; Craig v. Bradley, 26 Mich. 353; Hubbardston Lumber Co. v. Bates, 31 Mich. 158; Dunks v. Fuller, 32 Mich. 242; Farrington v. Smith, 77 Mich. 550; Dailey v. King, 79 Mich. 573; Condon v. Hughes, 92 Mich. 367; Wylie v. Gamble, 95 Mich. 575; Bedier v. Fuller, 106 Mich. 342; Warnes v. Brubaker, 107 Mich. 440; Reed v. Ismond, 110 Mich. 16; Bennett v. Hickey, 112 Mich. 383; Speicher v. Thompson, 141 Mich. 654. When plaintiff learned of the fraud two courses were open to him, he might rescind the contract, and recover that with which he had parted, or he might retain the property, and recover his damages for the fraud. As before stated, plaintiff learned of the alleged fraud as early as September, and communicated with defendant in relation thereto. Did he indicate to defendant that he intended to rescind the contract ? On the contrary, if his testimony is to be believed and his letters mean what they say, his position was that he had been defrauded and must be made good by a reduction in the price of the land and in the amount of the monthly payments. This position was inconsistent with the idea of a rescission. The result of the trial has been that plaintiff has had the use of the farm for a year, during more than one-half of which he had knowledge of the fraud, and has also been permitted to recover back all he paid.

Judgment is reversed, and new trial ordered.

MoAlvay, Grant, Ostrander, and Hooker, JJ., concurred.


text:
    BATESON v. PHELPS’ ESTATE.
    Monet Paid — Taxes—Voluntary Payment — Recovery.
    One voluntarily paying taxes on land he does not own cannot recover from the owner of the land, though the taxes were assessed to the person paying them, and he paid them by mistake.
    Error to Wayne; Hosmer, J.
    Submitted February 8, 1906.
    (Docket No. 106.)
    Decided September 20, 1906.
    Samuel R. Bateson presented a claim against the estate of Ralph Phelps, deceased, for taxes paid by mistake on property of the decedent. The claim was disallowed by the commissioners, and claimant appealed to the circuit court. There was judgment for the estate on a verdict directed by the court, and claimant brings error.
    Affirmed.

      Franklin L. Lord, for appellant.

      Ralph Phelps, Jr. and Orla B. Taylor, for appellee.
   Moore, J.

The plaintiff commenced two proceedings for the purpose of recovering taxes paid by him on a description of real estate owned by his wife, but assessed to him, which description included a small parcel of real estate owned by the late Ralph Phelps.

The first of these cases is Bateson v. City of Detroit. The other is the case at bar. In the first of these cases an opinion was handed down which may be found in Bateson v. City of Detroit, 148 Mich. 582. The facts are precisely alike in both cases, and it is not necessary to repeat them here.

The circuit judge directed a verdict in favor of defendant for two reasons, first, because the assessment was invalid, and second, because the payment by Mr. Bateson was a voluntary one.

The record discloses that the taxes, for the recovery of which this proceeding is brought, were paid by the plaintiff upon real estate which was not owned by, though it was assessed to, him. It is doubtless true that these payments were made by mistake, and it may be that in equity the plaintiff should be reimbursed for the amount so paid, but with the facts as they are, we think these payments must be held to have been voluntary ones, and that the circuit judge was right in directing a verdict. See 2 Cooley on Taxation (3d Ed.), p. 1495. Keener on Quasi-Contracts, p. 388. Bateson v. City of Detroit, supra.

Judgment is affirmed.

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


author: Hooker, J.

text:
    FLYNN v. HOLMES.

    1. Mortgages — Deed Absolute in Form — Operation as Mortgage-Title of Grantor.
    A deed absolute, given as security, does not have effect to divest the legal title subject to an equity to compel a reconveyance, upon redemption, enforceable only in a court of equity, but the legal title remains in the mortgagor, and is susceptible of recognition and protection by a court of law.
    2. Same — Title of Mortgagor — Sale on Execution.
    The title of the mortgagor to land which has been conveyed by a deed, absolute in form, but intended to operate as a mortgage, is a legal title which may be levied upon and sold on execution against the mortgagor.
    3. Same — Rights of Execution Purchaser.
    The purchaser on execution of the interest of the grantor in a deed absolute, intended to operate as a mortgage, takes a legal interest or title and is not obliged by section 9167, 3 Comp. Laws, to file his bill in aid of execution to ascertain the equities of the parties.
    Appeal from Kalamazoo; Adams, J.
    Submitted April 18, 1906.
    (Docket No. 82.)
    Decided July 23, 1906.
    Bill by Lawrence Flynn against Andrew J. Holmes to remove a cloud from the title to land. Defendant filed an answer in the nature of a cross-bill asking for a writ of assistance. Complainant demurred to the cross-bill and filed a plea. From an order overruling the demurrer and plea, complainant appeals.
    Affirmed.
    (See 142 Mich. 373.)

      William A. Luby, for complainant.

      Osborn & Mills, for defendant.

       Rehearing denied March 6, 1907.

   Hooker, J.

The complainant’s bill was filed to remove a cloud from his title to land, and to enjoin defend- , ant from taking steps to obtain possession under a sheriff’s deed. Briefly stated, the facts alleged are that on October 27,1903, the defendant recovered a circuit court judgment against the-complainant for $434.75 damages and $28.10 costs. Execution was levied on the premises, a city lot, and dwelling thereon, occupied by the defendant . at the time as his homestead. The sheriff caused an appraisal to be made, as required in cases of levies upon homesteads. It was appraised at $2,350. A copy of the appraisal and a demand of payment of the amount due within 60 days was then made by the sheriff upon the complainant. On August 28, 1903, the premises were sold upon execution sale for $2,300, and the certificate was duly filed. Several irregularities in the proceedings are alleged, including the charge that the amount of complainant’s exemption was never paid to him, and also that the proceeding was fraudulent. December 8, 1904, a sheriff’s deed of the premises w.as made, and is now on file and recorded in the register’s office, constituting the cloud referred to. The bill contains only the following allusion to the nature of complainant’s interest, or title to the premises, viz.:

“That at the date of the said levy there was unpaid upon the contract of purchase, by virtue of which your orator holds said premises, the sum of more than $300. ,,
“ That after the levy of the said execution and before the said pretended sale of the said premises your orator paid upon said contract of purchase the sum of more than $100, and he alleges that by such payment he increased his interest in the said lands and hereditaments, and that the interest so acquired could not be sold by the said Shields under and by virtue of the said levy.
That after the said levy and before the said sale your orator alleges that he acquired a further interest in the said premises by improvements made thereon, and that the interest so acquired could not be sold by the said Shields under and by virtue of the said levy.”

It alleges that the defendant has instituted no proceedings in aid of execution, or otherwise, to ascertain and determine the rights, titles, and equities of the complainant in the premises, either before or after the sale. It prays that the proceedings be decreed to be void, set aside, and vacated, and that defendant be restrained from any attempt to acquire possession under them.

The defendant filed an answer denying most of the allegations of the bill. It prayed the benefit of a demurrer to the bill for want of equity, and for the reason that compláinant should be held bound by the return of the sheriff, and may not deny or contradict the same. He alleged, by way of cross-bill, that at the time of the levy the complainant was the real owner of the premises; that on or about the day of the sale an arrangement was made by the defendant with the sheriff, whereby and under the terms of which the defendant procured certificates of deposit, aggregating $1,500, and placed them in the hands of his solicitors to be held for and on account of the sheriff and as his depositaries, to be paid to the complainant by the sheriff whenever he would accept the same as his ex-eruption, which fund has been kept subject to the demand of the sheriff, of which complainant was notified. It is alleged, further, that before the levy was made, the complainant had borrowed a sum of money from Charles F. Davis, and, to secure the repayment thereof, gave him a deed of the property and took back from him a land contract, as a mere security, for the fraudulent purpose of covering up said property, and causing it to appear of record that Davis was the owner, when he was not and has never claimed to be, complainant always having claimed it to be his homestead; that, after the sale, a tender of the exemption money was made to complainant, who did not refuse to receive it, but asked for time to determine whether he would accept it, and he has not since notified defendant or the sheriff of his determination ; that, although the period of redemption has expired, complainant withholds possession from defendant against his rights. It is further alleged that all of the questions raised by the bill have been litigated and determined between the parties and are res ad judicata, and complainant is barred thereby from any right to relief in this case. The cross-bill prays that it be decreed:

(1) That the levy and sale are regular and valid; (2) that at the time of the levy, complainant was the owner of the land and that Davis had a mere security thereon, and was not the owner; (3) that as between complainant and defendant the deed to Davis was and is fraudulent and void; (4) that defendant is entitled to possession of the premises, and that complainant withholds the same from him unlawfully; (5) that complainant be required to yield possession and that a writ of assistance issue; (6) general relief.

To this answer and cross-bill complainant demurred:

(1) Generally; (2) because the defendant has not attempted to have his rights determined within a year after the sale as required by statute; (3) because Davis is a necessary party.

This demurrer was filed March 16, 1905. On March 18, 1905, complainant caused a plea to be filed, alleging that defendant did not make known, at the time of the sale, the true condition of the title. The plea and demurrer were overruled, and the complainant has appealed.

The case may be resolved into the following questions:

1. Was Davis a necessary party to the cross-bill ?

2. What was the nature of the complainant’s title which defendant attempted to levy upon and sell ?

These questions can profitably be discussed together. We are justified by the demurrer in assuming that complainant, owning the premises in fee, mortgaged them to Davis to secure an indebtedness by giving him a deed absolute, though retaining the possession of the premises. It does not appear that the deed was recorded. The effect of this instrument upon its face is to divest the title of the grantor and convey it to the grantee. To sustain defendant’s contention, we must be able to say that this deed did not have that effect, because the contract, of which it was the culmination, was that it should not convey the legal title, but only a right by way of security — in other words, that it was a mortgage, sometimes called an ‘ ‘ equitable mortgage.”

It is said on behalf of the complainant that the execution was levied upon an equitable interest, and therefore a bill should have been filed in aid of the execution under 3 Comp. Laws, § 9167. The defendant denies the premise, insisting that the levy was upon a legal interest, and that therefore no bill was necessary. Upon the theory that this was a deed or a mortgage in fraud of creditors, equity alone would have jurisdiction to set the instrument aside, in aid of the execution. On the other hand, if the instrument was a mortgage, as between the parties, it is said that the legal title was still in the mortgagor, and that it might be levied upon, the purcháser taking subject to the mortgage. So the matter is resolved into the question, does a deed absolute, where given as security, have the effect to divest the legal title subject to an equity to compel a reconveyance, upon redemption, enforceable only ,in a court of equity, or is the effect of such a deed limited by the fact that it is made and delivered as security merely, so that it has the same effect as a deed containing the defeasance — i. e., a mortgage — leaving the legal title in the mortgagor, susceptible of recognition and protection by a court of law.

Logically it would seem that the writing should not be varied by parol testimony, in the absence of fraud, either at law or in equity; but the cases are numerous where it has been held that the fact may be shown in equity, though there is no fraud or mistake shown in the procurement of the deed, and it is too late to question them. See Wadsworth v. Loranger, Har. Ch. (Mich.) 113, where, -on a bill to redeem, it was said by the Chancellor:

“ That a deed absolute in terms may be proved by parol to have been intended by the parties to operate only as a mortgage, cannot admit a doubt.”

In Swetland v. Swetland, 3 Mich. 482 (a bill to redeem), a similar holding was made.

In Fuller v. Parrish, 3 Mich. 211, it was held, in an action at law, that “ parol evidence is admissible, in a court of law, to show that a bill of sale absolute on its face was intended as a mortgage.” Green, P. J., said:

It is conceded, on the part of the plaintiff in error, that, in a court of equity, it would be entirely competent to show by parol proof that a deed, absolute on its face, was intended as a mortgage, and that there effect would be given to it according to the true intent of the parties. This has been too long and too well settled, and too distinctly recognized by our own courts, to admit of any question. But it is contended that it is not competent in a court of law; and why not ? So far as the statute of frauds may be supposed to affect the question, that is equally binding upon and receives the same construction in a court of chancery as in a court of law; and so it is with that most familiar and well-established rulé that ‘ parol and contemporaneous evidence is inadmissible to •contradict or vary the terms of a written instrument.

In Cleland v. Taylor, 3 Mich. 201, it was held:

“ A fraudulent deed may be as fully and effectually set aside in an action of ejectment in a court of law, as upon a bill of complaint in a court of equity.”

In Emerson v. Atwater, 7 Mich. 22 (an equity case), Manning, J., said:

“ It is objected to the relief given complainant in the court below that the case made by the bill is one of express trust, and that, by "statute (2 Comp Laws 1857, § 3177), an express trust can be created by a deed or conveyance in writing only.
“ It is also objected that, if the case shows an absolute conveyance, but intended by the parties as a security or mortgage only, the deed, being absolute on its face, cannot be turned into a mortgage by parol proof, or by proof of a contemporaneous parol agreement.
“ The bill makes a case of conveyance in the nature of a mortgage, with power to Atwater to sell a part or the whole of the premises, to pay the incumbrances, and what Emerson was owing him; reserving the surplus, if any, to Emerson. This view does not wholly extricate the case from the first objection, if there be any force in that objection; for tíie statute that requires express trusts to be created by deed or conveyance in writing includes powers ‘over or concerning lands,’ as well as express trusts.
“ In Wadsworth v. Loranger, Har. Ch. (Mich.) 113, Chancellor Farnsworth says, ‘ that a deed, absolute in its terms, may be proved by parol to have been intended by the parties to operate only as a mortgage, Cannot admit of a doubt’ — referring to Strong v. Stewart, 4 Johns. Ch. (N. Y.) 167, James v. Johnson, 6 Johns. Ch. (N. Y.) 417, and Van Buren v. Olmstead, 5 Paige (N. Y.), 9. In that case, there was a parol cotemporary agreement, as in the case before us.
“ In Fuller v. Parrish, 3 Mich. 211, parol evidence was admitted to show a bill of sale, absolute on its face, was intended by the parties to be a mortgage. That was a case at law, and it was admitted, by the plaintiff in error, that such evidence would be competent in a court of equity. Green, P. J., in giving the opinion of the court, says:
“ ‘It is conceded, on the part of the plaintiff in error, that, in a court of equity, it would be entirely competent to show by parol proof that a deed, absolute on its face, was intended as a mortgage, and that there effect would be given to it according to the true intent of the parties. This has been too long and too well settled, and too distinctly recognized by our own courts, to admit of any question. ’
“And in Swetland v. Swetland, 3 Mich. 482, it seems to be taken for granted as the law, both by counsel and court. Wing, J., says:
“ ‘ If it appeared the debt due from Eli to William was not extinguished by the delivery of the deed to William, or that the deed was made for the purpose of securing the payment of a debt, it would be our duty to declare it to be a mortgage,’
“We refer to these cases to show the general understanding of the bench and bar on this subject, and the injustice that would be done by overruling, at this late day, the case of Wadsworth v. Loranger, to those who may have looked to that case for the law, and have acquired rights under the law as there laid down. This consideration, of itself, if we believed that case to be erroneous in principle, which we do not, would cause us to hesitate long before overruling it, believing it would be both better and safer to leave it to the legislature to correct the error, than to undertake it ourselves, as all intervening rights would, in that case, be saved, and injustice be done to no one.”

See Hill v. Goodrich, 39 Mich. 440; Hunt v. Middlesworth, 44 Mich. 451; Hurst v. Beaver, 50 Mich. 614; Wolf v. O’Connor, 88 Mich. 132 (13 L. R. A. 693); Clark v. Landon, 90 Mich. 90; Pinch v. Willard, 108 Mich. 208. In the latter case, involving a bill of sale absolute, many cases not specifically mentioned in this opinion are cited.

It is held in New York that the effect of a deed absolute,, by way of security, is to create a lien upon the premises, by way of mortgage, and that it does not divest the legal title of the mortgagor, there being no difference in that respect from a case where the defeasance is expressed in the deed, in a separate instrument, or where it rests in parol. In Shattuck v. Bascom, 105 N. Y. 39, the plaintiff sought to recover a quantity of the hemlock bark which defendant had peeled from trees on a certain parcel -of land. The defendant answered, claiming title to the land, and therefore to the bark.' It was undisputed that the defendant had the title, unless it was defeated by a tax sale and deed to the plaintiff’s father. Some time previous to the bringing of this action, the defendant had. quitclaimed the premises to Coleman, and he began an action against plaintiff’s father, under whom the plaintiffs claim, to set aside the tax deed. This resulted in favor of' the defendant therein. After the entry of that judgment, and before the commencement of the action before the court, Coleman reconveyed the land to the defendant, and upon the trial it was undisputed that the deed to Coleman from the defendant was given as security, and was, in fact, a mortgage. The court said:

“ Although the conveyance from the defendant to Coleman was in form a deed, it was in fact a mortgage, and had all the incidents of a mortgage. Coleman could not, upon that deed, have maintained an action of ejectment against his grantor or any other person. All he acquired by the deed was a lien upon the land for the security of his debt, and upon payment of the debt his interest in the land and his lien thereon would absolutely cease. Reconveyance by him to this defendant was not necessary to reinvest him with the absolute title, and was necessary only to clear up the record title. Murray v. Walker, 31 N. Y. 399; Horn v. Keteltas, 46 N. Y. 605; Carr v. Carr, 52 N. Y. 251; Morris v. Budlong, 78 N. Y. 543. Therefore the defendant did not, in any sense, take his title from Coleman, but his title was anterior to any interest which Coleman had in the land; and the legal title was in him at the time of the pendency of the action of Colman v. Shattuck, 2 Hun (N. Y.), 497. He was not a. party to that action, and it was not carried on at his instance, or for his benefit, and therefore he is not bound or estopped by the judgment rendered therein. It would be quite a novel doctrine to hold that a mortgagor is bound and estopped by a judgment rendered in an action by the mortgagee against some other person to which he was not a party. It was therefore open to the defendant upon the trial of this action to assail the title of the plaintiffs.”

In Barry v. Insurance Co., 110 N. Y. 1, an action was brought upon a policy of insurance which contained a condition that if the property insured should be sold or transferred, etc., it should avoid the policy. Two absolute deeds of the same were shown, but it was proved that the same were given as security, and were, in fact, mortgages. The court said:

‘ * The precise and only question in the case is, What effect does the law give to a deed, absolute in form, but which, in fact, is given as security for a debt ? Is it a conveyance of title or simply a chattel interest incapable of affecting the title, except through legal proceedings to enforce the collection of a debt ? It seems to us that the courts below have failed to appreciate the effect produced by the abolition of the distinction between law and equity, and the more recent decisions in this State depriving a mortgage of the characteristics of a conveyance. The cases are very numerous in our reports, and so familiar to the profession that we are surprised at the necessity, at this date, of referring to them at all. We will, however, cite a few of the cases showing that it has been the settled law for many years that a deed, though absolute in form, if given as security for a debt, is, to all intents and purposes, both at law and in equity, a mortgage only. The case of Murray v. Walker, 31 N. Y. 399, was in ejectment by one holding a patent from the State acquired under a certificate of purchase assigned to him, by the purchaser from the State, as security for a loan, against a tenant of one who had acquired the rights remaining in such assignor after the assignment. It was held that the patent, although absolute in form, was received by the patentee as security only, and that the action could not be maintained, Wright, J., saying:

“ ‘ A deed or conveyance absolute on its face, if really only intended to secure a debt, is deemed, in equity and at law, a mortgage, though the defeasance is by parol.’ ”

As early as the case of Hodges v. Insurance Co., 8 N. Y. 416, it was held that, as the deed was given as security for a debt, the title to fee property did not pass, the grantor therein remaining the legal owner of the property, and the fact might be shown by parol. See, also, Thorn v. Sutherland, 123 N. Y. 241; Macauley v. Smith, 132 N. Y. 532; Nicklin v. Betts Spring Co., 11 Or. 406; Dobbs v. Kellogg, 53 Wis. 448; King v. Greaves, 51 Mo. App. 534; O’Neill v. Murry, 6 Dak. 107; Meyer v. Elevator Co., 12 S. Dak. 172.

We are aware that there are authorities that hold that a court of equity only can declare a deed absolute upon its face to be a mortgage. In those States which adhere to the common-law rule that the mortgage is a deed and passes the title conditionally, such a holding should be expected, for the reason that the legal title had passed out of the mortgagor.

In the case of Ferris v. Wilcox, 51 Mich. 109, there is language possibly implying that one claiming against a deed absolute, is entitled to the rights of a mortgagor in equity only. But if the learned jurist intended to lay down such a rule, which was unnecessary to a disposition of the case and which is not certain, he apparently rested it upon the proposition that only equity could admit parol evidence to show a contract of defeasance and a recognition of the doctrine that the title actually passed by the deed. We find no other case in this State casting doubt on the earlier cases cited, and these have been approved in many cases, as we have already shown. We will refer to some cases relied on by the appellant. The case of Jeffery v. Hursh, 42 Mich. 564, is not necessarily antagonistic to the rule discussed here. The question was one of right of possession merely, and Mr. Justice Graves said:

“Admitting that in fact the absolute deed from Mrs. Hursh was intended as a mortgage, it was no defense against plaintiffs’ action for possession, and they were entitled to prevail, notwithstanding, according to her construction of the transaction, her remedy would be in equity, and not by ejectment.”

Messmore v. Huggard, 46 Mich. 564, does not dispose of this question. There the creditor attacked the alleged mortgage as fraudulent and void as to him, and it was held he must go into a court of equity to try such a question, for reasons there given, which we need not repeat.

That is a different case from one where the creditor levies only on the equity of redemption and sells only that, a practice justified, by the case of - Gorham v. Arnold, 22 Mich. 247, where the distinction is shown. The late case of Daniel v. Palmer, 124 Mich. 335, was also an attack upon a conveyance, valid between the parties, for fraud. This deed is not valid as an absolute conveyance between the parties, and is not attacked for fraud.

In the light of the authorities cited, we conclude that this conveyance was a mortgage; that the title ( commonly called the equity of redemption) was the legal title subject to the lien of the mortgage; that it was subject to levy and sale, as all of the interest of the mortgagor. . The appellee purchased it, and in doing so took it subject to the outstanding mortgage in the hands of Davis, from which he may redeem, failing in which Davis may foreclose. It is true that the bill alleges that the mortgage was fraudulently made, but the record shows that the appellee has not asked that it be set aside, or made Davis a party, which there was no occasion to do. The answer demurred to shows a tender of the homestead exemption.

The decree will be affirmed, with costs of both courts.

Carpenter, C. J., and Montgomery, Ostrander, and Moore, JJ., concurred.


author: Moore, J. Grant, J.

text:
    JUNTILLA v. CALUMET & HECLA MINING CO.

    Sales — Action fob Pbioe — Concurrent Contracts — Identity— Question of Pact.
    In an action for the price of railroad ties, the question whether the ties in issue were furnished on a contract with a partnership of which plaintiff was a member, and which had been fully paid, or whether they were furnished by plaintiff alone on an independent contract, held, under the evidence, to be a question for the jury. Grant, J., Carpenter, C. J., and Hooker, J., dissenting.
    Error to Houghton; Streeter, J.
    Submitted February 13, 1906.
    (Docket No. 144.)
    Decided September 20, 1906.
    Assumpsit by Samuel Juntilla against the Calumet & Hecla Mining Company for goods sold and delivered. There was judgment for defendant on a verdict directed by the court, and plaintiff brings error.
    Reversed.

      John Kiiskila (Burritt & Burritt, of counsel), for appellant.

      Chadbourne & Rees, for appellee.

       Rehearing denied December 17, 1906.

   Moore, J.

The plaintiff brought suit to recover the válue of railroad ties which he claims to have sold and delivered to the defendant. It was the, claim of defendant that it had a contract with one Ruonawara to deliver to it ties, that afterwards this contract was assigned by Ruonawara to S. Juntilla & Co., that the ties involved in this controversy were delivered under the contract so assigned, that bills were rendered therefor in the name of S. Juntilla & Co., that payments thereon were made for a large amount, and that afterwards it was found that some of the ties were out by trespass from the land of one Ryan, for which ties the defendant paid Ryan $375, which payment, added to the previous payment, overpaid Juntilla & Co. The circuit judge directed a verdict for defendant.

It was the claim of the plaintiff that the ties for which suit was brought were not delivered under the Ruonawara contract which was assigned to Juntilla & Co., but that the plaintiff alone was interested in the ties for which suit was brought. We think this presented a question of fact which should have been submitted to the jury.

Judgment is reversed, and new trial ordered.

McAlvay, Blair, Montgomery, and Ostrander, JJ., concurred with Moore, J.

Grant, J.

(dissenting). I think the court correctly directed a verdict for the defendant. On October 15, 1897, the defendant gave an order to one Ruonawara for 8,500 ties. Ruonawara evidently accepted the order. On November 10, 1897, upon the back of this order he made an assignment absolute in form to S. Juntilla & Co., and S. Juntilla & Co. through their attorneys transmitted this order and assignment to the defendant, notifying it to pay all moneys accruing thereon to S.. Juntilla & Co. The method of doing business was as follows: When any ties were delivered defendant sent a statement of the number to S. Juntilla & Co. S. Juntilla & Co. then rendered a bill for the amount due them, which the defendant paid. Ruonawara trespassed upon some land and cut a considerable number of ties therefrom. The owner of the land made a claim against the company. Negotiations were entered into, the amount of the trespass agreed upon, paid by the company, and deducted from the amount due S. Juntilla & Co. Of this plaintiff was aware. ' He subsequently claimed that the ties coveréd by this bill were not furnished upon the Ruonawara contract, but by him through other parties. He took no steps to enforce this claim until he brought this suit, four days only before it would have been barred by the statute of limitations. Plaintiff gave no notice to the defendant that this transaction was his own, or that there was any dissolution of the partnership, and left the defendant the right to infer that it was dealing with the partnership. Deducting the amount paid for the trespass, S. Juntilla & Co. were paid in full. All the ties specified in the contract were not delivered. A part were delivered in the fall of 1897, and a part were delivered in the spring of 1898. Later another delivery was made and a bill rendered, dated July 20, 1898, for $863.87. The bill was rendered in the same manner as the others, in the name of S. Juntilla & Co., and the defendant was justified in treating it as a part of the Ruonawara contract and as a partnership transaction.

I do not think there was any question of fact to submit to the jury, and that the judgment should be affirmed.

Carpenter, C. J., and Hooker J., concurred with Grant, J.