text:
    BECKER v. LA CORE. SAME v. JOHNSON. SAME v. MEBERT. SAME v. WILSON. SAME v. WILCOX.
    Chattel Mortgages — Conditional Sale —r Merchandise Pub-chased for Resale — Recording with Register of Deeds— Statutes.
    Where plaintiff, an automobile distributor, sold on conditional sale contracts to a dealer a number of automobiles for resale, but neglected to record same in the office of the register of deeds of the county where said automobiles were located, as required by 3 Comp. Laws 1915, §' 11988, such reservation of title was void as against good-faith purchasers of said dealer.
    Error to Grand Traverse; Mayne (Frederick W.), J.
    Submitted April 13, 1920.
    (Docket Nos. 53-57.)
    Decided September 30, 1920.
    Separate actions of replevin by Ray E. Becker, doing business as the Becker Auto Company, against John O. La Core, Guy M. Johnson, A. W. Mebert, William E. Wilson, and Fred Wilcox for the possession of certain automobiles. The cases were consolidated and tried before the court without a jury. Judgment for defendants. Plaintiff brings error.
    Affirmed.

      Connine & Connine (Cornelius Hofflus, of counsel), for appellant.

      Patchin & Duncan and Clink & Williams, for appellees.
    These five cases were separately instituted, but inasmuch. as they involved the same questions, they were tried together in the circuit court before the judge without a jury. In each case the plaintiff had brought replevin to secure possession of an automobile sold by the plaintiff to one Rice, and by said Rice sold to the individual defendant
    It appears that on the 6th day of September, 1916, plaintiff (as distributor for the Saxon automobile) entered into what is called a “limited dealer’s” agreement with one Fred C. Rice, as dealer. The contract is a very lengthy one. Its first section follows:
    “Subject to the conditions hereinafter expressed, Distributor hereby grants to Dealer the right, during the continuance of this agreement, to purchase from Distributor, automobiles supplied by The Saxon Motor Car Corporation, hereinafter referred to as Manufacturer, for re-sale by Dealer within, the following described territory, and none other, to-wit: Leelanau, Benzie and Grand Traverse counties, Michigan. Distributor agrees to protect Dealer in the right so-granted, to the extent that Distributor will refer to-Dealer inquiries for Saxon automobiles received from Dealer’s territory, and except as hereinafter provided, will not knowingly sell automobiles to other persons in Dealer’s territory during the continuance of this agreement.”
    It provided for the sale by the distributor and acceptance by the dealer of not less than 25 Saxon automobiles between the date of the contract and July 31, 1917. At the time the contract was entered into, the plaintiff (distributor) was doing business in Grand Rapids and Fred C. Rice (dealer) was the proprietor of an establishment in Traverse City, Mich., where he carried a stock of goods and merchandise, consisting of three or four makes of automobiles, auto tires, greases, oils, auto accessories and parts, auto fixtures^ and supplies, gasoline and containers, purchased from \ different manufacturers and dealers and kept by him for re-sale.

      On December 8,1916, plaintiff delivered to said Rice the three automobiles involved in the La Core, Johnson and Wilcox cases, and on January 16, 1917, the two automobiles involved in the Mebert and Wilson cases. Three machines were delivered to Rice under title retaining or conditional sale contracts in the following form:
    “Grand Rapids, Mich., Dec. 8th, 1916.
    “I hereby acknowledge that I have received of the Becker Auto Company one Saxon automobile, No. 21387-25212, which I agree to purchase from them on the following stipulated terms: I agree to pay the Becker Auto Company, or their order, the sum of seven hundred twenty-one and 57/100 ($721.57) dollars, first initial payment, one hundred sixty-seven and 37/100 ($167.37) dollars, the receipt of which is hereby confessed and acknowledged, balance of five hundred fifty-four and 20/100 ($554.20) dollars, payable as per the following note which is a part of this contract. . Should I secure an order for this car, then I agree to remit the proceeds to the Becker Auto Company, and secure bill of sale from them before delivering same.
    “In the case of failure to pay said balance as herein specified, or if said automobile is removed, or attempted to be removed, from the city in which I reside, or be otherwise disposed of, or if I shall sell or incumber, or shall attempt to sell or incumber said motor car; or whenever the said Becker Auto Company shall deem the debt insecure, then the full amount unpaid hereunder, including the attached note, shall become due and payable forthwith, and at the option of the said Becker Auto Company, they may, without any previous notice or demand of performance and without being guilty of any trespass or tort and without rendering themselves liable to refund any moneys, enter any premises where said automobile may be and, without process of law, immediately take possession of and to said automobile and remove same from any premises where said automobile may be found.
    “In case of failure to pay said balance according to the terms of this contract, I will, on demand, return said automobile in its original condition, to the garage or place of business of said Becker Auto Company, free from all charges or claims of any nature, or they may at their option, make such disposition of said motor car as they shall deem fit, and all money paid by me shall be retained by them as liquidated damages for non-fulfilment of this contract. Or said motor car may be sold with or without notice, either at public or private sale and the proceeds, less the expense of taking, removing, holding and selling said motor car, shall be credited upon the amount unpaid hereunder; or without such sale there may be credited upon the amount unpaid the fair market value of said motor car at the time of repossessing the same, and in either event, I promise and agree to pay the balance forthwith. I agree to pay promptly when due all taxes, assessments or other public charges which may be levied upon said motor car, as well as all storage and other carrying charges.
    “I further agree to save the Becker Auto Company harmless from all liens, attachments, etc., that may be applied against the car, and in case any expense is incurred by them because of such liens, attachments, etc., then such amount shall be added to and become a part of the unpaid balance of my note or it shall, at their option, become a personal debt owing by me to said Becker Auto Company, and I am to be held responsible for same. It is further agreed that the loss, injury, or destruction of said motor car shall not operate in any manner to release me from payment as herein specified, and the giving of notes or renewals or extensions thereof shall not release me from the conditions of this agreement.
    “I agree not to use this car in any way whatsoever and will protect and keep it in such condition that the Becker Auto Company, in case they repossess same, may be able to dispose of it as a new car. I further agree to permit any properly designated representative of the Becker Auto Company to inspect this car at any time.
    “It is agreed that the title to, ownership in, and right of possession of said motor car are vested in said Becker Auto Company until all indebtedness as specified in this contract, also any judgments which they, their successors, or assigns may obtain therefor, shall have been fully paid in money at which time ownership shall pass to me.
    “I agree not to sell, transfer or assign this contract and lease without the written consent of said Becker Auto Company.
    “I acknowledge the receipt of a true copy of this contract.”
    The 5 machines covered by these 5 contracts were a part of the 25 mentioned in the limited dealer’s agreement then subsisting between the plaintiff and said Rice. The said limited .dealer’s agreement was not revoked by the parties nor modified, except by the execution by plaintiff and Rice of the 5 title retaining contracts. Rice, having secured possession of the 5 machines, covered by the title retaining contracts, later sold them to the 5 individual defendants, each of whom paid him in full for the machine so purchased. Rice did not pay the plaintiff for the machines or secure a bill of sale from plaintiff for each machine as sold, as he had contracted to do in the several conditional sale contracts. Subsequent to said sales, however, he made large payments to plaintiff which were credited by plaintiff on other contracts not involved in these suits, with his (Rice’s) consent. Copies of all 5 of the conditional sale contracts, more or less defective as to signatures and as to the character of the affidavit attached thereto, were filed in the office of the city clerk of Traverse City, Michigan. No copy or purported copy or original of any of said 5 conditional sale contracts was at any time filed in the office of the register of deeds for Grand Traverse county.
    The learned circuit judge, after an exhaustive hearing, held that the defendants in each of the cases were purchasers in good faith and without notice, either actual or constructive, of the claim of title of the plaintiff and that judgment should be entered in each case to the effect that said defendants did not unlawfully detain said automobiles, and judgment was so entered, with costs against plaintiff.
   Brooke, J.

(after stating the facts). Plaintiff presents its case in this court under 47 assignments of error which we will not consider in detail. Determination may, we think, be predicated upon a single undisputed fact which is fatal to plaintiff’s contention, and that fact is that the conditional sale contracts were not filed in the office of the register of deeds for Grand Traverse county. The statute (Act No. 64, Pub. Acts 1915, 3 Comp. Laws 1915, § 11912) provides:

“Whenever any personal property is sold and delivered to any person, firm or corporation regularly engaged or about to engage in the business of buying and selling such personal property, with the condition affixed to the sale that the title thereto is to remain in the vendor of such personal property until the purchase price thereof shall have been paid, with'the agreement express or implied, that the same may be re-sold, every such conditional sale in order for the reservation of title to be valid, except as between the vendor and vendee shall be evidenced in writing and the written contract of every such conditional sale or a true copy thereof shall be filed and discharged in the same manner as chattel mortgages are required to be filed and discharged.”

The law covering the filing of chattel mortgages, as amended by Act No. 163, Pub. Acts 1915 (3 Comp. Laws 1915, § 11988), is as follows:

“Section 10. Every mortgage or conveyance intended to operate as a mortgage of goods and chattels which shall hereafter be made which shall not be accompanied by an immediate delivery and followed by an actual and continued change of possession of the things mortgaged, shall be absolutely void as against the creditors of the mortgagor, and as against subsequent purchasers or mortgagees in good faith, unless the mortgage or a true copy thereof shall be filed in the office of the township clerk of the township, or city clerk of the city, or city recorder of cities having no officer known as city clerk, where the goods or chattels are located, and also where the mortgagor resides, except when the mortgagor is a non-resident of the State, when the mortgage or a true copy thereof shall be filed in the office of the township, clerk of the township, or city clerk of the city, or city recorder of cities having no officer known as city clerk, where the property is. And unless the mortgagor named in such mortgage or conveyance intended to operate as a mortgage, or some person for him having knowledge of the facts shall, before the filing of the same, make and annex thereto an affidavit setting forth that the consideration of said instrument was actual and adequate, and that the same was. given in good faith for the purposes. in such instrument set forth. No officer shall receive such instrument or file the same in his office until such affidavit is made and annexed thereto. Every person who shall knowingly make any false statement in any such affidavit, upon conviction thereof shall be deemed guilty of the crime of perjury: ProvidedThat in case of corporations engaged in transporting passengers or freight, or conveying electricity or gas or telephonic or telegraphic communications, all that is or shall bé required is the filing of the copy of such mortgage with the register of deeds of each county through which the lines or property there-, of passes, and such mortgages shall not require any affidavit of renewal: Provided further, That when such mortgage or other conveyance intended to operate as a mortgage is given upon a stock of merchandise or merchandise and fixtures or any part thereof purchased for re-sale at retail then such instrument or a true copy thereof, and of the affidavit thereto attached shall also be filed in the office of the register of deeds of the county where the goods and chattels are located.”

The last proviso in the section above quoted provides that whenever the mortgage or other conveyance intended to operate as a mortgage upon any stock of merchandise or any part thereof purchased for re-sale at retail, then such instrument or a true copy thereof shall also be filed in the office of the register, of deeds of the county where the chattels are located.

It is strenuously insisted by plaintiff that the automobiles in question in this case were not purchased for re-sale within the meaning of this section and did not constitute a part of' his stock of merchandise within such meaning and therefore that the provisions of the foregoing section do not apply. We are of the opinion that the exact converse is conclusively established by the records in these cases. The limited dealer’s contract provides in terms for the re-sale of the 25 automobiles therein ordered. Rice was a dealer in automobiles, maintaining an establishment for the sale of automobiles and the plaintiff dealt with him as such dealer. Moreover, the conditional sale contracts themselves contemplate the re-sale of the several machines by Rice, he agreeing to get orders for them and then secure from the plaintiff a bill of sale before delivery of possession thereof. There is no question that the plaintiff knew they were to be re-sold and that when they were delivered to Rice they became a part of his stock of merchandise held for re-sale (under the provisions of the conditional sale contracts). Under these circumstances, there can be no question but that the provisions of the act last above cited apply.

No question arises as to the good faith of the defendants. They dealt with Rice under the belief that he was the owner of the cars purchased by them, clothed with full authority to convey title as well as possession. They had no actual notice of the plaintiff’s lease and may not be charged with constructive notice because of plaintiff’s failure to follow the statutory requirements. This determination based upon facts undisputed, disposes of the case.

Many other questions touching the sufficiency of the copies filed with the city clerk, the agency of Rice, the estoppel of plaintiff by its own acts, etc., are argued at large by counsel. Their consideration is unnecessary.

The judgment is affirmed.

Moore, C. J., and Steere, Fellows, Stone, Clark, Bird, and Sharpe, JJ., concurred.


source: Caselaw Access Project

author: Brooke, J.

license: Public Domain

text:
    WEBERT v. ROBERTS.
    Brokers — Commissions—Statute of Frauds — Ready, Willing, and Able.
    In an action by a real-estate broker for commissions on tbe sale of real estate, defendant refusing to consummate tbe sale, there being no question that defendant signed the listing contract, thereby satisfying the statute of frauds, the finding of the trial judge that plaintiff thereafter produced a purchaser ready, willing, and able to purchase the property for cash, held, justified by the testimony.
    Error to Ingham; Wiest (Howard), J.
    Submitted June 16, 1920.
    (Docket No. 56.)
    Decided September 30, 1920.
    Assumpsit in justice’s court by Lewis G. Webert against Bessie L. Roberts for commissions on the sale of real estate. There was judgment for plaintiff, and defendant appealed to the circuit court. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Cummins & Nichols, for appellant.

      Harry E. Hooker, for appellee.
   Brooke, J.

In this case the learned circuit judge before whom the case was tried, without a jury, filed the following findings of fact and law :

“Facts.
“February 7th, 1919, defendant listed her residence in the city of Lansing with plaintiff, a real estate broker, for sale, the material part of the writing being as follows:
“ 'Residence property price $5,000.
“ ‘St. and No. 319 Bartlett.
“ ‘Terms
“ ‘Owner B. R. Roberts.
“ T agree to pay 3 per cent, of the selling price as commission to L. Or. Webert if this property is sold through his efforts or to any one with whom he has negotiated concerning the same.
“ ‘The exclusive sale is given..................for a period of
....................days from date thereof..........’
“April 9, 1919, plaintiff, through his efforts to sell the property, found a prospective purchaser in Carl B. Saxton, who on that day paid plaintiff $100 as an earnest and signed an agreement reading as follows:
“ ‘Webert Real Estate
“ ‘Memoranda of agreement made and entered into this date, April 9, 1919, by and between Mrs. Roberts, party of the first part, and Carl B. Saxton, party of the second part, to-wit: Party of the first part agrees to sell to said second party property known as 319 Bartlett st., Lansing, Michigan, on conditions as follows: Five thousand ($5,000) dollars. Terms $100 on signing this agreement, receipt of which is hereby acknowledged, the balance of forty-nine hundred ($4,900) dollars due and payable on or before date of possession.
“ ‘Said first party further agrees to deliver papers showing good marketable title and give possession on or before 45 days from date, also a regular commission of three due for services rendered.
“ ‘Party of the second part agrees to buy the above described property on the terms and conditions above stated and sign necessary papers on or before thirty days.
“ ‘This agreement is made subject to approval of owner.’
“Plaintiff sent the $100 paid by Mr. Saxton to Mrs. Roberts and she refused to take it and refused to sell at the price agreed upon between plaintiff and. Mr. Saxton.
“Defendant claims that she was induced to sign the listing agreement through misrepresentation of plaintiff ; that it was agreed she should have $5,000 for her property over and above plaintiff’s commission, and to that end.it was to be listed at $5,200, and she was informed that it was so listed and signed the writing without reading it and it was not read to her, she wholly relying upon the assurance given her by plaintiff’s representative.
“The defendant admitting that she signed the writing, it is to be taken as it appears unless by a preponderance of the evidence it is made to appear that it does not speak the true agreement by reason of! fraud practiced upon defendant in obtaining her signature.
“The court is unable to find with defendant upon such issue of fact. When Mr. Saxton signed the agreement to purchase he did not have $5,000 in money; he had sold a place in which he had an equity of about $2,500, but the money had not been paid to him and was not yet paid when this case was heard in the justice’s court, but he had the promise of Kenney and Sayer, real estate dealers, that they would loan him $5,000 with which to purchase the Roberts property. The evidence shows that Kenney and Sayer were willing to make the loan to Mr. Saxton and had the money with which to do so. It appears that Mr. Saxton intended in good faith to purchase the property and could have procured the necessary money and was prevented from so purchasing solely by the refusal of the defendant to sell the property for $5,000.
“Law.
“The purchase by Mr. Saxton, if consummated, would have been a sale for cash. The agreement signed by Mr. Saxton, provided for the payment of $100 at the time of signing and the other $4,900 on or before date of possession and for defendant to der liver papers showing good marketable title and give possession on or before 45 days,- and performance thereof by Mr. Saxton, would, in law as well as in fact, have constituted him a purchaser for cash. In Fischer v. Bell, 91 Ind. 243, the agreement provided for a cash sale and required the money to be paid upon the execution of the deed and it was held:
“ ‘Had the vendor signed and ratified the agreement made by his agent with the purchaser, it would have been a cash sale, because by its terms, upon the execution of the deed, he was entitled to every cent of the purchase money.’
“In the case at bar a cash sale was agreed to by Mr. Saxton and the character of the sale is not changed by the fact that time was provided for closing the deal and for delivery of possession, for it is common knowledge that after agreement to purchase it takes some time to examine the abstract and to prepare the necessary papers. ' The provision in the agreement on the part of Mr. Saxton to buy on the terms and conditions ‘above stated’ required him to pay the $4,900 on the date of possession, and defendant could have, had payment as soon as she wanted had she accepted the agreement and executed a deed and tendered the deed and possession.
“The agreement on the part of Mr. Saxton to_ ‘buy the described property on the terms and conditions above stated, and to sign necessary papers on or before thirty days,’ must be construed in connection with the terms and conditions ‘above stated’ and there it is expressly agreed he should pay in full in cash on or before date of possession. The agreement on the part of Mr. Saxton to sign necessary papers on or before thirty days is meaningless because under the agreement there would be no papers for him to sign. I am of the opinion that Mr. Saxton would have had to pay the full price immediately upon tender of a deed and of possession and the sale was therefore a sale for cash.
“Plaintiff under the listing agreement found a purchaser in Mr. Saxton, ready and willing and able to buy the property.. That Mr. Saxton was willing to buy clearly appears and that he was ready and able to buy on the terms of cash did not depend upon his having the money with which to do so in hand at the time he agreed to take the property, but upon his ability to perform at the time fixed for the passing of title and right of possession. Jaffe v. Nagel, 114 N. Y. Supp. 905.
“If Mr. Saxton had the promise of a loan of the money with which to pay for the property, and such promise could be relied upon, then he is to be held as ready and able to perform, and such would be true, even though he expected to secure the loan on the property so purchased.
“The holding in the case of McCune v. Badger, 126 Wis. 186 (105 N. W. 667), to the effect that the purchaser produced by the broker was not able to buy because ‘he,’ the broker, ‘did not pretend that his party was ever in circumstances to accept a deed of the property and pay the required amount of money therefor, except upon condition that certain persons, who had promised to loan the money to him on the property redeemed the promise,’ would seem to support the contention of the defendant herein that Mr. Saxton was not able, were it not that the later case of McCabe v. Jones, 141 Wis. 540 (124 N. W. 486), points out the error of accepting that decision as a general rule of law.
“In the McCabe Case it was held:
“‘It is common knowledge that very many, if not a majority of contracts for the purchase and sale of real estate are expected to be carried out by obtaining a part of the purchase money on a mortgage of the property itself, to be executed contemporaneously with the execution of the deed. If the purchaser has his arrangement made so that the money will be forthcoming at the moment the deed is passed to him, no reason is perceived why he may not truly be said to be ready, able and willing to complete the deal, although a part of the money comes from one who at the same moment receives a mortgage of the newly-purchased premises. * * * Where a real estate broker sues for his commissions on a sale which his principal refuses to carry out, he cannot, of course, prove his case by showing that he produced a straw bidder, but, on the other hand, he is not required to show that he brought a man with the cash all in hand in legal tender. He is simply required to show that he produced a purchaser who was ready, willing and pecuniarily able within the time fixed to take and pay for the property. Mechem on Agency, § 966. Pecuniarily able in this connection must, of course, have a reasonable construction. It cannot mean that the proposed purchaser must necessarily have all the money in his pocketbook or to his credit at the bank, but that he is able to command the necessary money to close the deal on reasonable notice, or within the time limited by the vendor, i£ a time be limited.’
“The plaintiff is entitled to recover and judgment will be entered in his favor and against the defendant for the sum of one hundred and fifty-five dollars, together with his costs to be taxed.”

Defendant and appellant assigns error as follows:

“1. The court erred in overruling defendant’s motion to strike out the paper signed by the witness, Carl Saxton, purporting to be an agreement to buy the property of defendant.
“2. The court erred in finding as a matter of law that under the paper or agreement signed by Mr. Sax-ton, he would have had to pay the full price immediately upon the tender of a deed and of possession and that the sale was therefore a sale for cash.
“3. The court erred in finding as a matter of law that Mr. Saxton was a purchaser able to buy and pay cash if he had the promise of the loan of the money with which to pay for the property and such promise could be relied upon and that such would be true, even though he expected to secure the loan on the property so purchased.
“4. The court erred in finding as a matter of fact that said Saxton was a purchaser able to buy and pay cash for the property for the reason that there is no evidence tending to support such finding.
“5. The court erred in finding as a fact that said Carl Saxton was a purchaser able to pay cash for said property at any time when he was tendered a deed and possession, because said finding of fact is against the clear weight of the evidence.
“6. The court erred in finding as a fact that at the time Mr. Saxton signed the agreement to purchase, he had a promise of Kenney & Sayer, real estate dealers, that they would loan him $5,000 with which to purchase defendant’s property, because said finding is against the clear weight of the evidence.”

In support of appellant’s position, as indicated by her assignments of error, she cites Reynor v. Mackrill, 1 A. L. R. 523 (181 Iowa, 210, 164 N. W. 335), and the cases cited in the note thereto as follows: Mattingly v. Pennie, 105 Cal. 514 (39 Pac. 200, 45 Am. St. Rep. 87); Robertson v. Allen, 107 C. C. A. 254, 184 Fed. 372; Birnbaum v. Unger, 135 N. Y. Supp. 1; McCune v. Badger, 126 Wis. 186 (105 N. W. 667). We have examined them all and are of opinion that the facts involved in each of them make the several decisions thereunder inapplicable to the case at bar. There is no question that the defendant signed the listing contract, thereby satisfying the statute of frauds. We think the finding of the circuit judge to the effect that plaintiff thereafter produced a purchaser ready, willing and able to purchase the property, for cash, is justified by the testimony in the case. Garrisi v. Kass, 201 Mich. 643.

The judgment is affirmed.

Steere, Fellows, Stone, Clark, Bird, and Sharpe, JJ., concurred. Moore, C. J., did not sit.


author: Steere, J.

text:
    WESTINGHOUSE ELECTRIC & MANUFACTURING CO. v. HUPP.
    1. Bills and Notes — Extension of Time of Payment — Release of Indorsers.
    An agreement by tbe creditor witb tbe principal debtor which" extends tbe time of payment of tbe debt without tbe consent of tbe surety or indorser secondarily liable discharges tbe latter.
    2. Same.
    Where a corporation gave to plaintiff certain notes indorsed by its president and secretary, an agreement to extend tbe
    On reservation of rights against party secondarily liable upon a bill or note upon granting extension of time to party primarily liable, as preventing discharge of former, see note in 46 L. R. A. (N. S.) 92. time of payment upon condition that plaintiff retain the notes as collateral, which was assented to by the president who undertook to also sp'eak for the secretary, the latter in the meantime having ceased to be ah officer of the corporation and having no knowledge of the arrangement, operated to release him from liability as an indorser.
    Error to Wayne; Mandell (Henry A.), J.
    Submitted June 16, 1920.
    (Docket No. 45.)
    Decided September 30, 1920.
    Assumpsit by the Westinghouse Electric & Manufacturing Company against Robert C. Hupp and Louis G. Hupp on certain promissory notes. Plaintiff later assigned its claim against Robert C. Hupp. Judgment for defendant. Plaintiff brings error.
    Affirmed.

      Millis, Griffin, Seely & Streeter (George B. Murphy, of counsel), for appellant.

      Stevenson, Carpenter, Butzel & Backus (William S. McDowell, of counsel), for appellee.
   Steere, J.

This action was begun in the Wayne county circuit court on December 23, 1914, to recover from defendants a balance due on the following promissory notes:

“$5,939.83 Detroit, Mich., June 17, 1912
“Three months (3) after date we promise to pay to Westinghouse Electric and Manufacturing Co. or order Fifty-nine Hundred Thirty-nine and 83/100 Dollars, at Old Detroit National Bank, Detroit, Mich., value received with 6 per cent, interest per annum.
“No. 876. Due Sept. 17, 1912.
“R. C. H. Corporation.
“B. Q. Hazlewood, Vice-President.
“September 17, 1912. Detroit, Michigan. Protested for npn-payment.
“W. E. Winkler, Notary Public.
(Indorsements on back of note.)
“R. C. Hupp,
“L. G. Hupp,
“Pay to the order of Old Detroit Nat’l Bank
“Detroit, Mich.
“Westinghouse Electric & Manufacturing Co.,
“T. W. Siemon, Treasurer.
“Credit.
“Sept. 18 — 12. $5,000.00 e/o principal.
“Int. to Sept. 17/12, $91.07
“Without recourse.
“First and Old Detroit National Bank,
“By Byron W. Clute, Asst. Cashier.”
“$6,000.00 Detroit, Mich., June 17, 1912.
“Three months (8) after date we promise to pay to Westinghouse Electric & Manufacturing Co., or order Six Thousand and no/100 dollars at First National Bank, Detroit, Mich., value received with six per cent, interest per annum.
“No. 875. Due Sept. 17, 1912.
“R. C. H. Corporation,
“B. Q. Hazlewood.
(Written across face of note) — “Protested Sept. 17th, 1912. Frank Temple.”
(Back of note indorsements.)
“R. C. Hupp,
“L. G. Hupp,
“Pay to the order of First National Bank, Detroit, Mich.,
“Westinghouse Electric & Manuf’g Co., T. W. Siemon Treasurer.
“Int. pd. Sept. 18/12 to Sept. 17/12, $92.00 Without recourse,
“First and Old Detroit Nat’l Bank,
“By Byron W. Clute, Asst. Cashier.”

The evidence introduced is mostly documentary, that which is oral being devoted mainly to identification and amplification of correspondence between the parties. The only issue pressed for determination at the trial was whether defendant Louis G. • Hupp, remained liable as an indorser on said notes, from which he claimed release by reason of plaintiff having granted extension of time for payment to the principal debtor without his knowledge or consent and since commencement of this action has released Robert C. Hupp, his co-indorser, from liability to it by selling and assigning its right of action against said Robert C. to the latter’s wife.

The trial court in due time filed findings of fact and conclusions of law sustaining defendant’s contention that he had been released by extension of time of payment, and entered judgment in his favor. Plaintiff’s right of review was preserved by proper objections, motions and exceptions.

These notes were given by the “R. C. H. Corporation,” an automobile manufacturing concern located in Detroit, for supplies and equipment in its line purchased from the plaintiff Westinghouse Electric & Manufacturing Company of Pittsburg, Pa. When the notes were given and dishonored the Hupp brothers, who indorsed them, were stockholders and officers of the R. C. H. Corporation, Robert C. Hupp- being its president and Louis G. Hupp its secretary and treasurer. Shortly before the notes fell due plaintiff indorsed and sent them for collection to the First National Bank of Detroit. They were dishonored when presented for payment on the day they fell due and promptly protested with proper notice to the two indorsers, who were yet stockholders and officers of the maker of the notes.

About the time the notes fell due and while they were yet in the hands of the Detroit bank, the R. C. H. Corporation sent plaintiff $5,000 and interest on both notes to and including the date they fell due with a renewal note to cover the balance owing on said notes. Plaintiff’s then treasurer and secretary testified that the $5,000 was credited on the note for $5,939.83, and interest to September 18, 1912, was credited on both notesi but said:'

“I do not know what became of the renewal note; it was never accepted by us as a renewal, and the last I knew of the note it was in the possession of the Westinghouse company.”

There is no evidence it was ever returned, and defendant Louis G. Hupp who, as secretary and treasurer of the maker, sent the remittance and renewal note to plaintiff, testified:

“The renewal note was never returned to me or to the R. C. Hupp Corporation prior to the time that I left the corporation, November 1, 1912.”

At the time the notes were dishonored the R. C. H. Corporation was financially embarrassed and not long thereafter creditors became solicitous over its condition, resulting in a certain committee acting with its officers, taking steps to effect some adjustment of its difficulties. A form of proposed agreement dated October 25, 1912, between its creditors and the corporation was prepared, by which it was provided that the agreeing creditor would extend the time of any indebtedness owing him, or it, by the corporation, however evidenced, until May 4, 1914, in consideration of which a controlling amount of stock in the corporation should be transferred to named trustees, with right to. vote the same as owners until payment of its debts, resignation of the present directors would be tendered in writing, new directors be elected and other steps' taken under changed control and management to effect liquidation of its indebtedness. A copy of this agreement with a circular letter of explanation to creditors and request to execute the agreement was sent plaintiff on November 1, 1912, which was answered by its secretary November 8, 1912, expressing a desire to co-operate, but saying in part:

. “The major portion of our claim, however, is represented by notes of the corporation, indorsed by R. C. and L. G. Hupp. We feel, if it is possible to fio so legally, we are entitled to whatever value this indorsement may have, either now or in the future, and we wish to inquire whether your committee has the authority, and will agree that if we accept the plan of the committee, we may hold our indorsed notes as collateral.”

The letter then describes the notes and payment of $5,000 with interest, and says:

“No payments have been made except the above for $5,000, which has been credited account principal. The R. C. H. Corporation have offered us their note for $6,939.83, in renewal of the balance due us, which we have declined, but which is still in our possession.”

This was answered November 11, 1912, by R. C. Hupp, who signed as president, saying in part:

“The writer wishes to say on his own behalf, and also on behalf of Mr. L. G. Hupp, notes held indorsed by us you may continue to hold as collateral.”

Other letters were exchanged, resulting finally in the proposed agreement for extension of time, dated October 25th, being executed in behalf of plaintiff by T. W. Siemón, its treasurer, and for the R. C. H. Corporation by J. H. Hartz, its treasurer and general manager, containing, however, the following provision:

“With the right reserved to the W. E. & M. Co. to hold notes indorsed by R. C. and L. G. Hupp and now in the possession of the W. E. & M. Co. as collateral security to any note or notes taken under this agreement.”

In a letter dated November 21, 1912, returning the signed agreement to the R. C. H. Corporation, plaintiff calls attention to this provision, saying: “This is in accordance with your note of November 11th.” This was acknowledged by letter of November 25th, recognizing as “entirely satisfactory” the provision quoted. Of this the trial court said, and found in fact:

“Mr. L. G. Hupp has testified that after resigning from any position that he held with the corporation he knew nothing of this correspondence; knew nothing of the indorsement made by the plaintiff on the agreement that it entered into with the Hupp Corporation concerning the notes being held as collateral, and knew nothing of the undertaking made by his brother in his behalf that the notes might be held as collateral, and he has stated positively under oath that he gave his brother no authority to make such statement in his behalf, and that he believed, and had reason to believe, that all liability on the notes on his part was at an end during the early part of November, 1912. His statements with regard to these facts are uncontradicted. They appear to be logical and truthful, and must be accepted as established facts in the case.”

After exchange of executed copies for extension of time the R. C. H. Corporation paid plaintiff interest on the unpaid balance of the two notes until June 25, 1913. It thereafter became hopelessly insolvent, went out of business, and liquidated. Plaintiff received no money from the liquidation.

On December 23, 1914, this action was begun by plaintiff against the two defendants, who appeared and separately pleaded the general issue. Louis G. also gave notice of special defenses, which included discharge by extension pf time granted the maker without his. knowledge or consent.

While the action was pending plaintiff, on July 10, 1918, assigned all its right, title and interest in the claim declared upon against Robert C. Hupp to his wife, Elsie E. Hupp, for an expressed consideration of $1,000, with the hyperbolic assurance in the instrument of transfer that such claim so transferred represented all claims of every name and nature it had “in connection with the aforementioned liability, or may have against the said Robert C. Hupp from the beginning of the world to the day of the date of these presents,” making it equally clear that his brother, Louis G., was, so far as plaintiff could provide, retained to tread the wine-press alone in this action which plaintiff expressly reserved the right to proceed with against him “for the principal sum of said indebtedness, together with accrued interest less one thousand dollars ($1,000), the consideration recited in this instrument,” etc.

Upon the trial a jury was impanelled, but after proofs were closed both sides, moved for a directed verdict and by consent of parties the jury was excused. The case was then argued and submitted, taken under advisement by the court and an opinion subsequently filed with findings granting 'defendants’ motion, followed by entry of judgment in form as on directed verdict.

Plaintiff moved to set aside the directed verdict and for judgment non obstante, which was denied, and has removed the case to this court for review on numerous assignments of error which in their essence, and as argued, center against the three grounds urged for defendant before the trial court, concisely stated in' its opinion as follows:

“First, that the time on the original notes has been extended without his consent; second, that the plaintiff had released the prior indorser, R. C. Hupp; and third, that the plaintiff accepted the renewal note as tendered with the $5,000 check, on September 17, 1912, and has ever since retained the same, and in its letter of November 8, 1912, expresses an intention to retain said renewal note.”

Because the agreement entered into with the maker of the two fiotes extended the credit for a definite period of approximately 18 months without the consent of indorser, Louis G. Hupp, only reserving the indorsed notes “as collateral security to any note or notes taken under this agreement,” the trial court held upon the first ground as a conclusion of law under the undisputed facts that the reservation claimed was not such that had Louis G. Hupp paid the notes “he could immediately recover the same from the maker,” and by the shown postponement made without his consent he was released as an indorser.

As a result of the creditors’- agreement for reorganization Louis G. Hupp was succeeded by a new secretary and left the corporation on November 1st. Up to that time plaintiff had not returned the renewal note nor advised the corporation it was- not acceptable, nor even, so far as shown, acknowledged receipt of the remittance sent with it. Not until November 8th, in reply to the letter relative to an agreement by creditors, did plaintiff state its position, telling how the remittance had been applied, and that it “declined” the renewal note for the balance, which it had received and retained and yet keeps possession of so far as shown here. This note was for $6,939.83. The corporation paid plaintiff interest on that amount until June 25,1913. Plaintiff did not produce nor offer any explanation of what'became of that renewal note. R. C. Hupp was president of the corporation, named from his initials, and held a very large interest in it. He was president when he wrote the letter of November 11, 1912, in which he wished “to say in his own behalf and also on behalf of Mr. L. G. Hupp, the notes held, indorsed by us, you may continue to hold as collateral.” L. G. Hupp, who had but a small interest in the corporation, had then, been succeeded by another secretary and was no longer connected with the concern. His denial that he wished to say, or saidt or then knew his brother had said for him that the notes with his indorsement on them could be held as collateral, is positive and undisputed.

• The bill to make uniform the law of negotiable instruments recommended by the commissioners on uniform State laws in their national conference has been adopted by Pennsylvania and Michigan as well as most other States. It is largely a codification of the generally prevailing law upon the subject as settled by legislation and interpretation, the controlling purpose being uniformity with as few changes in the various jurisdictions as were necessary to accomplish that purpose. It may be noted the act has changed the previous rule in this State as to an indorser before delivery which held him to be a joint maker. It was. adopted here by Act No. 265, Pub. Acts 1905, being chapter 119, 2 Comp. Laws 1915. Said act provides in part as follows:

“Section 6041. The person ‘primarily’ liable on an instrument is the person who by the terms of the instrument is absolutely required to pay the same. All other parties are ‘secondarily’ liable.”
“Sec. 6105. Where a person not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as indorser in! accordance with the following rules:
“First. If the instrument is payable to the order of a third person, he is liable to the payee and to all subsequent parties;” * * *
“Sec. 6109. As respects one another, indorsers are liable prima facie in the order in which they indorse; but evidence is admissible to show that as between or_ among themselves they have agreed otherwise. Joint payees or joint indorsees who indorse are deemed to indorse jointly and severally.”
“Sec. 6161. A person secondarily liable on the instrument is discharged: * * *
“Third. By the discharge of a prior party. * * *.
“Sixth. By any agreement binding upon the holder to extend^ the time of payment, or to postpone the holder’s right to enforce the instrument, unless made with the assent of the party secondarily liable, or unless the right of recourse against such party is expressly reserved.”

It is undisputed that by the terms of those notes the R. C. Hupp Corporation as maker was absolutely required to pay the same, and primarily liable. The Hupp brothers placed their signatures in blank on the back of the instruments before delivery. They were not otherwise parties to them, and we,re casual indorsers secondarily liable. The order in which they indorsed not only appears on the back of the notes but it was shown in fact without dispute that Robert C. first indorsed them, after which they were taken into where Louis G. was for his signature. While notice and protest for non-payment fixed their secondary liability it did not change the relative positions of maker, indorsers or payee, or of the indorsers as respects one another. With the plain language prescribing, we see no occasion to theorize on those propositions.

When plaintiff received and credited the payments of September 18th, and retained the new note accompanying the remittance asking extension of time for the balance, without indicating disapproval until a further extension of time for 18 months was asked, and then first “declined” it but kept the note, it is not a far-fetched assumption from its conduct that it at that time assented to the proposition for extension of time on the balance and the belated declination when new conditions arose was an afterthought. But as plaintiff’s then secretary and treasurer testified it was not, and the uncommunicated intent not to accept the unreturned renewal note was entertained from the time of its receipt, that proposition may be passed as inconclusive.

The sixth provision of section 6161 is but the statutory adoption of a well-settled rule relative to the rights of indorsers of negotiable instruments with a generally recognized exception to such rule. It has long been the general rule that an agreement by the creditor with the principal debtor which extends the time of payment of th'e debt without the consent of the surety, or indorser secondarily liable, discharges the latter. That there was between the corporation which made these notes and plaintiff, the payee and holder, a lengthy and elaborate agreement in writing by which their time of payment was extended for approximately a year and a half, is undisputed. R. C. Hupp, the first indorser, consented to this agreement. L. G. Hupp, the second indorser, did not. Both were made defendants in this action. Through the kind offices of his wife and a thousand dollars, R. C.Tlupp, who had renewed his obligation in writing, was dropped from this litigation and relieved of all liability to the full amount of this paper, so far as plaintiff was concerned, “from the beginning of the world.” “In the order in which they indorsed” he was prior to his brother, and, “as respects one another,” in such order prima facie liable. There is no evidence that they agreed otherwise between themselves, and Louis G. denies that such was the case. But the question of successive liability of the indorsers was not passed upon by the trial court and need not be determined here.

The question of controlling importance is whether plaintiff, under the concluding provision of subdivision 6, section 6161, “expressly reserved” against defendant Louis G. Hupp “right of recourse” when extending time of payment by agreement with the R. C. H. Corporation and postponing its right to enforce the notes' against it upon which he was secondarily liable. This exception to the rule of release by an agreement between the principal debtor and the holder of the paper in which right of recourse is reserved against the indorser, or party secondarily liable, is but an embodiment in the statute in concise words of a well-recognized common-law rule, which has, however, been the subject of much discussion and controversy in the past. It is now statute law in this State, and need not be reviewed beyond its application here. Abundant discussion of the subject can be found in the text-books on negotiable instruments and cases cited in footnotes under Meredith v. Dibrell, 46 L. R. A. (N. S.) 92 (127 Term. 387, 155 S. W. 163, Ann. Cas. 1914B, 1079). In the Meredith Case itself it was found that the right of recourse was expressly reserved against the indorser and held that notice of such reservation was not necessary when extending time of payment to the maker.

Before adoption of the present negotiable instrument act this court has on occasion noted and recognized the common-law exception that a surety is not released by extension of time where right of immediate recourse against him is expressly reserved by the creditor. Bailey v. Gould, Walk. Ch. 482; Big Rapids Nat. Bank v. Peters, 120 Mich. 518. Counsel for plaintiff cite and apparently rely on the latter case as of controlling significance. While in that case the question of extension of time with reservation of recourse was involved, as here, the law was not in dispute but its application to the facts, and the case turned on whether or not the bank as a matter of fact did extend time and reserve its immediate right of action against the sureties, which the trial court submitted to the jury, while defendant insisted a verdict should have been directed in its behalf. This court in reviewing the case said:

“We cannot agree with counsel that there was no testimony tending to show such reservation. * * * We think the verdict was not so at variance with the weight of the evidence as to make a refusal to grant a new trial erroneous,”

and declined to disturb' the finding of court and jury that there never was any definite extension of time or waiver of right to proceed forthwith against the sureties.

Here there was an unquestioned extension of time for 18 months without notice to the surety, and the claimed reservation of right of recourse held the old notes as collateral to that extension. Clearly no “right of recourse” before expiration of that time is expressly reserved in hsec verba, and it is as fairly inferable from the correspondence and language of the agreement that the intention was to suspend the right of recourse during the 18 months as. to reserve it. Plaintiff was willing to grant the 18 months extension. All it apparently desired was to strengthen the security on that extension by the indorsements on' the old notes. It had the assurance of the president of the R. C. H. Corporation that the indorsers, he being one, consented to the extension. It may be inferred that on the mistaken assumption both indorsers consented plaintiff inserted in the agreement its right to hold the notes as collateral to any notes taken under the agreement for extension as it was led to believe all had agreed to such reservation and postponement of the right of recourse, which would be valid if they had all consented. Appropriate wording was used to that end. It ran with the principal promise of the R. C. H. Corporation to pay the indebtedness at the expiration of 18 months, as additional security for its performance. “Collateral security” has a well-known legal meaning. It signifies:

“A separate obligation attached to any contract to guarantee its performance.”. Bouvier’s Law- Diet.
“Security for the fulfilment of a contract or pecuniary obligation, in addition to the principal security.” Worcester’s Diet.
“In its common use, means additional, subsidiary security given to secure the principal obligation. It is a separate obligation. Such 'collateral security’ stands by the side of the principal promise as an additional or cumulative means for securing the payment of the debt. The etymology of ‘collateral’ security indicates that it is something running along with, and, as it were, parallel to, something else of a similar character. It is collateral to the original indebtedness.” Moffatt v. Corning 14 Colo. 104 (24 Pac. 7).

In National Park Bank v. Koehler, 204 N. Y. 174 (97 N. E. 468), under similar statutory provisions it was sought to hold the- indorser on a past due protested note under an agreement with the principal debtor to “hold the old note, with Mr. Koehler’s indorsement, as collateral, until the new notes are paid.” Of this the court said in part:

“So far as the protest of the old note is concerned, that fact cannot help out the agreement, if that agreement did operate to suspend the plaintiff’s right of action against the maker. ■ * * * Its. effect was to preclude plaintiff from maintaining any action upon the note against the maker; for the company could have objected that, under their agreement, it was to be held as collateral until the new notes were paid. Thus the right of action was, necessarily, suspended during the interval. * * * The difficulty is that in this, arrangement there was evidenced the intention of the parties to suspend action upon the note until a future day. * * * Within the rule of the authorities, as under the provisions of our negotiable instruments law, we musk hold that the agreement of the parties did not distinctly, nor impliedly, reserve the right of the bank to proceed by immediate action against the defendant. * * * If the parties actually had in mind a reservation of the right of action against the defendant; if they intended that the'transaction was subject to his consent, it would have been easy to have said so. It may be assumed that the plaintiff believed these conditions to have existed, or its assent would have been refused to the arrangement; but the obligation of such an indorser, as a surety, is strictissimi juris. He was entitled to insist that, within the strict application of the rule in such cases, he was released from his obligation by an agreement of the creditor with the principal debtor, to which he had not consented and extended the latter’s time of payment of its indebtedness.”

Wé find no occasion to disturb the conclusions of the trial court, that the right of recourse was not expressly reserved, and by entering into an agreement with the maker of the notes extending time of payment for a definite period of 18 months without the consent of defendant Louis G. Hupp plaintiff discharged him from liability as an indorser.

The judgment is therefore affirmed.

Moore, C. J., and Brooke, Fellows, Stone, Clark, Bird, and Sharper JJ., concurred.


author: Fellows, J.

text:
    STORY & CLARK PIANO CO. v. OTTAWA CIRCUIT JUDGE.
    1. Municipal Corporations — Vacating Street — Right oe City to Be Heard — Statutes.
    In proceedings under 1 Comp. Laws 1915, § 3353 et seq., by a private corporation to vacate a public street adjacent to its property in tbe city of Grand Haven, tbe right to appear and be beard, given by section 3359 to any person or persons “interested” is not so limited by tbe provisions of section 3355, giving tbe right to be beard to owners of land immediately adjoining, as to preclude tbe municipality from appearing and being beard.
    2. Same — Grand Haven Charter — Validity—Collateral Proceedings.
    Tbe validity of tbe charter of said city will not be determined in this collateral proceeding.
    3. Same — Evidence—Admissibility—Statutes.
    Tbe testimony of persons living on said street, other than those permitted to be beard in opposition to tbe vacation proceedings by section 3355, dealing with tbe use of tbe street by themselves and tbe public, and tbe inconvenience which would be occasioned to themselves and tbe public by its vacation, held, admissible.
    4. Certiorari — Weight of Evidence — Questions Reviewed.
    On certiorari tbe Supreme Court does not weigh tbe evidence and determine upon which side tbe preponderance rests, but concerns itself solely with tbe question as to whether there is any evidence to support tbe findings of the trial judge.
    5. Municipal Corporations — Vacating Street — Evidence—Sufficiency.
    Tbe finding of tbe trial judge that said street should not be vacated, considering tbe public interest, present and future, held, supported by tbe testimony.

      Certiorari to Ottawa; Cross. (Orien S.), J.
    Submitted August 17, 1920.
    (Docket No. 89.)
    Decided September 30, 1920.
    Petition by the Story & Clark Piano Company to vacate a street in the city of Grand Haven. The city appeared and opposed such petition. ■ From an order denying the petition, plaintiff brings certiorari;
    Affirmed.

      Lillie, Lillie & Lillie, for appellant.

      Louis H. Osterhous, for appellee.
   Fellows, J.

Petitioners own a frontage of 155.7 feet on both sides of Columbus street in the city of Grand Haven. Pursuant to the provisions of 1 Comp. Laws 1915, § 3353 et seq., it filed a petition in the circuit court for the county of Ottawa to vacate the street adjacent to its property. No question is raised as to the regularity of the proceedings. The city of Grand Haven appeared and opposed the granting of the prayer of the petition. Some two days were consumed in taking the testimony and at the conclusion of the hearing the trial judge denied the prayer of the petition and filed the following findings:

“A petition was filed to vacate a certain part of Columbus street in the city of Grand Haven, objections to the granting of an order were filed by the city of Grand Haven. Issue was joined and proofs taken in open court.
“It appears that Columbus street is one of the three streets in the city of Grand Haven, leading to the terminals of the Grand Trunk railway system, the docks of the Goodrich Transit Company and the Wisconsin Transit Company. It is the only street north of the main street of the city which leads to Water street. The team track of the Grand Trunk railway system extends along Water street and is used extensively from Columbus street to Washington street.
“While it is true that at present, Columbus street between First and Water streets, is not as much used as Washington street or Franklin street, yet if it were paved it would be used much more than Franklin street, and would to a great extent carry the traffic to and from the freight houses of the transportation companies and the factory districts.
“The city has its water and sewer pipes laid in and along Columbus street, from Water to First streets, and to grant the order in this case would take from the city the right to enter that part of the street to repair the water and sewer pipes.
“Petitioner conducts a large business in the city, gives good employment to a great many people, and is of vast benefit to the city. The desire of petitioner to further increase its production and make same more easily accomplished is to be commended, yet private interests cannot be advanced to the detriment of the public.
“That portion of the street sought to be vacated is necessary for the convenience of the public, and when paved will be of much greater benefit to the city, and will be in keeping with the general policy of the city to keep and maintain its streets leading to and from the water front and transportation facilities.
“Sufficient reasonable objections to making such vacation have been established. It is therefore ordered that the prayer of the petition be and the saméis hereby denied.”

We shall not discuss in detail each assignment of error. All of them have been considered, and such as are not discussed are regarded as unimportant in the disposition of the case.

It is urged that the city of Grand Haven has no right to be heard in this proceeding.. This is based quite largely upon the case of In re Albers’ Petition, 113 Mich. 640, the language found in that opinion particularly stressed in the instant case being: “The city is not a necessary party.” This language was there used by Mr. Justice Hooker in considering the question of the character of the proceedings. He had just stated that the proceedings were technically neither an action at law or a suit in chancery, and we might add to what was there said on this subject that the proceedings are proceedings in rem. Detroit Investment Co. v. Wayne Circuit Judge, 137 Mich. 108. But Mr. Justice Hooker, after using the language quoted, also said:

“We should hesitate to say that it might not be heard in opposition where any ‘reasonable objection to making such alteration or vacation’ could be shown.”

The question there under consideration is not the question here involved. As the right of the city to be heard in this proceeding in rem is now before us we should definitely settle it and to do so we must add to what was there said when this question was not in issue. We are impressed that the city has a right to be heard in a proceeding instituted to vacate any of its streets. The streets are for the use of the public and under the care and control of the municipality. Under the provisions of the act (1 Comp. Laws 1915, § 3359) the right to appear and be heard' is given to any person or persons “interested.” We do not think this is so limited by the provisions of section 3355 giving the right to be heard to owners of lands immediately adjoining that part of the street proposed to be vacated as to preclude the municipality from appearing and being heard. Obviously the city may not successfully raise fanciful, visionary or shadowy objections, but no such' objections are made in the instant case, nor is there anything upon this record showing that the city in attempting to retain the use of this street for the benefit of the public is acting in bad faith.

It is urged that the city may not be heard because its charter has never been validly adopted under the provisions of the home-rule act, so-called. We cannot determine the validity of the city charter in this collateral proceeding.

Certain persons who lived on Columbus street were called as witnesses by the city. Petitioner’s counsel objected to their giving testimony because they were not such persons as were permitted to be heard in opposition to the petition by the provisions of section 3355, 1 Comp. Laws 1915, and if they were entitled to be heard at all they could not be heard unless they had appeared in the case. Their testimony dealt with the use of the street by themselves and the public, and the inconvenience which would be occasioned to themselves and the public by its vacation. We know of no rule, either statutory or otherwise, which prohibited the city from calling them as witnesses. That they had a personal interest not asserted by an appearance in court and an active contest might affect the credit to be given their .testimony but it did not render it inadmissible. '

Upon certiorari we do not weigh the evidence and determine upon which side the preponderance rests. Our investigation of the evidence is directed solely to the question of whether there is any evidence to support the findings of the trial judge — to support the judgment. There is an abundance of evidence in this record to support the judgment, to sustain the findings of the circuit judge. This testimony is not without conflict; there is in the evidence sufficient to sustain a finding either way. While there is testimony tending to show that the. street is but little used at present, there is other testimony tending to show a considerable present use of it, particularly during the summer months. It is not used as much as streets which are paved, but that is quite universally true in all our cities and villages. If all streets were vacated which are not used as much as the main arteries of travel great inconvenience would result to ho inconsiderable portion of the public. There is testimony in this record showing that but little has been done by the city on the street to keep it up, but there is also testimony that the policy of the city has been not to expend money on streets which are soon to be paved; there is testimony that paving of this street is in contemplation of the city authorities. It leads to the railroads, steam and electric; to the docks of the lake steamers; is but a block from the leading street of the city upon which traffic is very congested. In fine, there is an abundance of testimony to establish both a present and a future public use, and a present and future public necessity, and a present and future public convenience. It is not a street merely upon paper, but has been one of the public streets of the city for over ,80 years. That its vacation would be of great private benefit to the petitioner is established. But the streets of a city may- not be vacated and their use surrendered to private interests solely on the grounds of private benefits. The public interest present and future must be considered. This the trial judge did. His .finding has support in the testimony.

The writ of certiorari must be dismissed and the judgment affirmed.

Moore, C. J., and Steere, Brooke, Stone, Clark, Bird, and Sharpe, JJ., concurred.


author: Stone, J.

text:
    TOWNSHIP OF NORTH STAR v. COWDRY.
    1. Municipal Corporations — Township Proceedings — Record— Parol Evidence — Admissibility.
    Though parol evidence is not admissible to contradict the record of the proceedings of a township board, it is admissible to show facts omitted from such record.
    2. Same — Supplementing Record by Parol Evidence.
    In an action by a township board to* recover the balance of a subscription made by defendant for the improvement of a certain highway in the township, parol evidence was admissible to show that the petition for the grading,.’ graveling, and tiling of said highway was voted on and accepted by the board, the record failing to show such affirmative action.
    3. Same — Action by Township Board — Statutes.
    In view of 1 Comp. Laws 1915, § 2053, providing that all suits or proceedings by or against a township in its corporate capacity shall be in the name of such township, said action was properly brought in the name of the township board, although the provision in the petition was to pay the money over to the township highway commissioner.

      4. Same — Highways and Streets — Improvement at Expense of Persons Interested.
    In view of 1 Comp. Laws 1915, § 4335, authorizing the improvement of highways at the expense of the persons interested, held, competent for the township board to receive money upon subscriptions for such purpose.
    5. Same — Defenses—Public Policy.
    That the township board improperly expended some of the township’s money in connection with that subscribed by defendant and others, in the improvement of said highway, would furnish no defense to this action, there being no question of public policy involved that can be invoked by defendant under the circumstances of this case.
    6. Same — Defenses—Estoppel..
    Where defendant not only petitioned for said improvement, but stood by and saw it completed before raising any objection, be is estopped to question tbe validity of tbe proceedings when called upon to pay tbe balance of bis subscription.
    Error to Gratiot; Moinet (Edward J.), J.
    Submitted September 18, 1920.
    (Docket No. 93.)
    Decided September 30, 1920.
    Assumpsit by the township of North Star against Douglas Cowdry for the amount of a subscription for the improvement of a highway. Judgment for plaintiff on a directed verdict. Defendant brings error.
    Affirmed.

      Searl & Searl and O. G. Tuttle, for appellant.

      John T. Mathews (O. L. Smith, of counsel), for appellee.
   Stone, J.

This case originated in justice’s court in the county of Gratiot, and was appealed to the circuit court of that county, where the plaintiff recovered a judgment of $80 damages upon a directed verdict. The action was in assumpsit to recover the balance of a subscription made by the defendant for the improvement of a certain public highway in the township of North Star in said county. The defendant has brought the case here upon writ of error. The declaration counted upon two subscriptions of defendant, one of $100 and one of $80. It was undisputed that the $100 subscription was paid before suit. The plea was the general issue with notices:

1. That defendant would show that the alleged contract, promise, or agreement upon which plaintiff seeks to recover was not within the scope of the powers of said plaintiff to make.

2. That defendant would show that the alleged contract was for the mere performance of its statutory duty and obligation, and was without consideration to said defendant.

3. Set-off.

As defendant offered no evidence upon the trial the details of the claim of set-off are not deemed material.

Section 4335, 1 Comp. Laws 1915, reads as follows:

_ “Whenever any person or persons interested in any highway, wish to improve the same by grading, graveling, macadamizing or paving they may do so at their own expense, and in such manner as may be approved by the highway commissioner; and when, sufficient means shall be providéd by such party or parties to make the improvement desired, the highway commissioner shall furnish a grade for such highway and direct the manner in which it shall be graded, and his per diem while so employed shall be paid by the township as though the township were making the improvement. The highway commissioner shall, if requested to do so by the party or parties making the improvement, supervise and direct the graveling, macadamizing or paving,' and his per diem while so employed shall be paid by the township as though the township were making the improvement: Provided, That no highway commissioner or any other town officer shall be awarded any contract for any labor to be performed under the provisions of this act, and any such contract, so awarded, shall be void.”

See, also, section 4641.

On April 7,1917, the defendant and nine other freeholders and taxpayers of said township signed a petition to the township board requesting the board to direct the highway commissioner of the township to drain, grade and gravel the highway beginning at a point one mile north of the center of the township, and extending east 1% miles.

The petition called for 4-inch tile along the highway in order to properly drain it. In consideration of which improvement the signers each agreed to pay the treasurer of the township the sum set opposite each name, the amount of defendant’s subscription being $100, and the aggregate of subscriptions being $494.

On May 23,1917, defendant and 9 other freeholders and taxpayers-of said township signed another written petition praying that the township board direct the highway commissioner to grade, gravel and properly drain the highway between sections 11 and 14, “intending hereby to continue the improvement heretofore requested east an additional 80 rods,” and upon this petition defendant subscribed $80, the language used being:

“And we, in consideration of such improvement, do hereby promise to pay to the highway commissioner of said township the amounts placed opposite our respective names, on or beifore said improvements are completed.”

This last petition was not signed by any of those, who signed the first petition, except the defendant. The subscriptions upon this last petition aggregated $230.

These petitions were finally pinned together and in that condition were presented to the township board at a meeting thereof held on June 29, 1917. The record of such meeting was as follows:

“Proceedings of the Town Board Meetings.
“Board meeting held on the 29th day of June, A. D. 1917.
“Meeting held in the town hall in township of North Star on above date. Members present, Thomas.Hamilton, chairman; S. G. Losey, clerk; D. S. Biddinger and S. S. Munson, justices of the peace. Ernest Webster, highway com.
“Moved and supported we except petition of J. H. Probst for a mile between sections 2 and 3 and 10 and 11 to be tiled and graveled. Motion carried.
_ “Petition of J. L. Mouser for 2 miles between sections 10 and 15 and 11 and 14 to be tiled and graveled. .Motion carried.
“E. P. Sprague petition for one mile to be graveled between section 31, North Star and section 6, Washington. Motion carried.
“Arthur Stine petition for 1 mile to be graveled between sections 34 and 35. Moved petition be allowed. Motion carried.
“Petition U. S. Barnaby for 2 miles of gravel between sections 28 and 29 and 29 and 32. Moved petition be allowed. Motion carried.
“R. L. Easterly petition for 1 mile. Moved petition be allowed between sections 4 and 9, to be tiled and graveled. Motion carried.
_ “Henry Jones’ petition. Moved and supported petition be excepted to be graveled between sections 31 and 32. Motion carried.
“Moved and supported this board instruct the highway commissioner to build these roads as specified in the several petitions.
“Moved we adjourn. Motion carried.”

The above proceedings were signed by all members of the board, and is the only record appearing on the books of the township of any proceeding, or any action had or taken, in regard to the matter at issue in this case, and the road in question.

After the meeting'of the township board in June, 1917, the highway commissioner procured a surveyor, and surveyed the road and had a profile made, and bought the tile and went to work on the highway. Such profile was made by the county surveyor. The highway commissioner took three blue prints of the profile to the township board at its meeting and laid them on the table, receiving one'copy back, and then tiled, graveled and graded the road, including the 80 rods in question in this case. So far as the record shows no other action was taken by the township board in regard to the improvement in question. The highway commissioner went on and built it as an officer, and expended therein some of the township funds that had been raised for road purposes generally in building the road, giving orders to the extent of more than $100 upon the township funds. All the funds subscribed, except the $80 here sued for, were handed over to the clerk, except that some subscriptions were paid in work, and in such cases they were receipted for and applied upon the subscriptions. The building of this road cost more than $1,000. The defendant paid the $100 which he signed for on the first petition, and this- suit was brought to collect the $80 subscription on the second petition.

The only action of the township board in any way touching the collection of these highway donations is shown by Exhibit E, which purports to be the proceedings of the township board at a meeting held on the 20th day of March, 1918, in which proceedings appears the following:

. “Motion made and supported that S. S. Munson be appointed to collect unpaid collections on highway donations. Motion carried.”

Upon the trial the offer in evidence of the proceedings of the township board was objected to by the defendant for the reason that the record did not show that any affirmative action had been taken, which objection was overruled and the record was read in evidence. The court, over the objection of defendant, then permitted witnesses — members of the board who were present — to testify in substance as follows:

“The motion was made and supported that we accept the petition of J. L. Mouser to gravel and grade the road described in the petition — gravel, grade and tile.”

Another member of the board testified as follows:

“The motion was made to accept these petitions, or accept the donations on these petitions toward graveling this portion of the road mentioned in this petition, two miles of road.”

Again the witness said:

“One of the board made a motion that we accept the petition and gravel, tile and grade that road, and we voted on it.”

This testimony was received against the objection of defendant, and numerous motions were made to strike the same from the record.

At the close of the plaintiff’s case, defendant’s counsel made a motion for a directed verdict in his behalf and for numerous reasons which are embraced in the assignments of error and are argued by counsel. The motion was overruled, and, the defendant announcing that he would not submit any testimony in view of the ruling of the court, a verdict for the plaintiff was directed.

There are numerous assignments of error, but they are grouped together by counsel and the following questions are discussed. It is the contention of counsel for defendant that the court erred:

“(1) In, permitting witnesses to testify and give parol evidence of what motions were made and proceedings had and taken, at the meetings of the township board other than that which appears in the township clerk’s records of these board meetings.
“(2) In holding and deciding that the township of North Star, as a township, could bring suit and collect money on the subscription paper, when the subscription did not run to the township of North Star, and no promise had been made therein to pay to the township.
“ (8) In holding and deciding that it was within the power of the township to receive money upon subscriptions like the one in question, and to mingle that money with township highway funds and build roads out of the highway funds, and then recover upon the subscriptions.
“(4) In holding that such proceedings had been taken by the township board, the highway commissioner, or either or both, or any of the authorities of the township, as would legally permit the highway commissioner to build the road in question, and in holding that such proceedings had been taken as would authorize the collection of the subscription, and the bringing of the suit in question, and particularly in denying our request to direct a verdict on the ground that it is contrary to public policy to permit private individuals by subscription to influence the action of the board and the highway commissioner to expend the money which had been raised by taxation generally, for the building of roads, upon a particular road which is petitioned for and partly paid for by the subscribers.
“(5) And, particularly, in holding and deciding against our contention shown all through the record by objections and motions to strike out testimony, and motion to direct verdict, that no such steps and proceedings had been taken as is authorized and required by statute to grade and gravel a road partly by subscription.
“(6) And generally in overruling our objections to the introduction of evidence, and our motions to strike out evidence, and particularly our motion and the several grounds thereof, made at the close of the case to direct a verdict against the plaintiff and in favor of the defendant of no cause of action, and in charging the jury that the plaintiff is entitled to recover the sum of $80 against the defendant, and in entering judgment for that amount against him.”

It is first urged by counsel for defendant under a proper assignment of error, that it is well settled that the proceedings of the township board cannot rest in parol, and that, except in a direct action to correct the record, the action of the township boards, and other official boards, can be proven only by the record kept by the proper official. Many cases are cited by counsel claimed to be in support of this proposition, beginning with Clark v. Holmes, 1 Doug. 390, including Stevenson v. Bay City, 26 Mich. 44; Larned v. Briscoe, 62 Mich. 393; Labadie v. Village of Ford, 185 Mich. 402.

While there is language used in some of these decisions which would tend to show that a record cannot be supplemented by parol evidence, an examination of the cases will show that the attempt was made to vary and contradict the record. We recognize the rule to be that the record cannot be contradicted, or impeached by parol testimony. We think the correct rule is well stated in Township of Taymouth v. Koehler, 35 Mich., at p. 22, the headnote of which reads as follows:

“Though parol evidence is not admissible to contradict a record, it may be introduced to show facts omitted to be stated of record; and the rights of creditors or third persons cannot be prejudiced by the neglect of the clerk to perform his duty in properly recording actual proceedings.”

It is frequently competent to show by parol matters in aid of the record where the same is ambiguous, or where entries have been omitted. School District v. Clark, 90 Mich. 435.

In Wheat v. Van Tine, 149 Mich. 314, at p. 317, Justice Grant, speaking for this court, said:

“Parol evidence is not admissible to contradict the record of the proceedings of the common council. It is admissible, however, to show facts omitted therefrom. The failure of a clerk to properly enter such proceedings cannot affect the rights of individuals who have acted upon the faith of the action of the council, in fact duly taken, but not recorded.” Citing cases.

We invite attention to the closing portion of that opinion, where it is claimed that parol evidence did not contradict the record, but only explained it. We call especial attention to the fact that the following entry appears in the proceedings of the township board above quoted:

“Moved and supported this board instruct the highway commissioner to build these roads as specified in the several petitions.”

We are of opinion that there was no error in the action of the court in receiving the parol testimony and the record of the township board.

It is next urged that the court erred in holding and deciding that the township of North Star, as a township, could bring suit to collect money on the subscription paper, it being claimed that the subscription did not run to the township of North Star. It is unnecessary to quote sections of the statute as to the duty of the township with reference to highways under the township system. There are certain limitations upon the power of the commissioner to expend money without action of the township board. An examination of these statutes will disclose that the township is represented as to highways by the highway commissioner and the township board, acting for the township. We think the view of counsel too narrow a one, and that the promise was made really to the township. The provision was to pay the money over to the highway commissioner, as an officer. Manifestly, this suit must be brought in the name of the township under the statute. By section 2053, 1 Comp. Laws 1915, it is provided that all suits or proceedings by or against the township, in its corporate capacity, shall be in the name of such township. As was said in Township of Bangor v. Transportation Co., 112 Mich. 601:

“We have, therefore, a valid debt due the township, and the proper officer authorizing the suit.”

The third and fourth points urged by the defendant may be considered together. There is no claim that section 4335, above quoted, is unconstitutional. We think it was competent for the township to receive money upon the subscriptions appearing in this case. The defendant ought not to escape payment of his subscription where it appears, , as it does here, that the money was expended by the township in good faith for the improvement of the highway in question, and where all other subscribers have paid their subscriptions. In our opinion it does not lie within the mouth of the defendant to question the power of the township to expend this money in connection with certain money of the township. Were it to be conceded that the township improperly expended some of the township’s money in connection with that subscribed by the defendant and others, we think that would be no reason why this defendant should not pay his subscription. We cannot ¡agree with counsel that there is any question of public policy here involved — at least any question of public policy that can be invoked by this defendant under the circumstances of the case. We have examined the cases cited upon this question and do not think them applicable.

One who has received benefit under a contract with a town cannot escape payment therefor upon the ground that it is ultra vires. Beloit v. Heineman, 128 Wis. 398 (107 N. W. 334). In that case the defendant had rented from the town of Beloit a stone crusher belonging to the town. He was sued for the rental and sought to raise many of the questions that aré raised by counsel in this case. In that case the court said:

“The cause of action presented was on contract to recover that which the defendant had promised to pay for the use of the town’s property. It was entirely a common-law cause of action, upon which the town, under its general corporate powers to sue and be sued, could maintain action, except for some statutory limitation. If it be true, as argued, that a vote of the electors was a necessary preliminary to the bringing of a suit, an objection on that ground went wholly in abatement. It did not deny the indebtedness of the defendant to the town nor the existence of the cause of action, but raised an obstacle which, until removed, postponed the right to commence the suit. This is distinctively matter in abatement, and, unless expressly pleaded, is waived.” Citing cases. (See the pleadings in the instant case.)
. “The further objection, which was not passed on by the trial court, that there was neither allegation nor record proof of formal resolution by the town board to institute the action, is exactly of the same character and ruled by the same consideration.
“Another contention, not reached by the trial court, is that a contract to lease to defendant the stone crusher was beyond the corporate power of the town, and that, even if within such power, it was not within the powers delegated by law to the town board or any member or members thereof. Whatever limitations may have existed on the power of the town or on the town board or its officers to confer upon the individual the right to use such machine, they are entirely immaterial to the defendant who has actually enjoyed that privilege under an attempted contract. No limitation rested on his ability or power to agree to pay for such use, and he, having received all the benefits of such a contract as if it were valid, cannot now question its validity in order to repudiate his agreement to pay a price for that which he has received.” Citing cases.

It is a significant fact that the defendant not only petitioned to have this work performed and improvement made, but he stood by and saw it completed before raising any objection, so far as appears by this record. Were this a proceeding in equity by him to restrain the payment of a tax or assessment, he would be held equitably estopped. . In the law case of Smith v. Carlow, 114 Mich. 67, this court said, speaking through Justice Grant:

“We think this case comes clearly within many other decisions of this court which hold that when parties stand by and see such improvements made, and take no steps to impeach their validity, they are estopped to question their validity when called upon to pay for them.”

See, also, Kiowiatkowski v. Dredging Co., 201 Mich. 251, 257. We quote from those cases because they are both law cases. There are scores of cases in our reports denying equitable relief under such, circum-. stances.

What we have said meets, in our opinion, the propositions urged by counsel in their fifth and sixth points. We have read this record and briefs of counsel with great care, and although we have not specifically referred to every point urged by counsel, we have examined every point argued and find no reversible error in the record. In our opinion the verdict and judgment are in accordance with the law and the facts disclosed upon the trial.

The judgment of the court below is affirmed.

Moore, C. J., and Steere, Brooke, Fellows, Clark, Bird, and Sharpe, JJ., concurred.