text:
    FISK v. LIVERPOOL & LONDON & GLOBE INSURANCE CO.
    1. Insurance — Fire Insurance — Notice of Loss — Waiver.
    The denial of liability on part of an insurance company by its adjusters constitutes a waiver of the filing of proofs of loss.
    2. Same — Powers of Agent.
    Powers possessed by agents of insurance companies, like those of agents of any other corporations, are not governed by any individual principle, but are to be interpreted in accordance with the general law of agency.
    3. Principal and Agent — Powers of Agent — Evidence.
    Agency cannot be proved by the statements, declarations or admissions of the agent made out of court, but must be established by tracing its source to some word or act of the alleged principal.
    4. Same — Admissions—Proof of Agency.
    The agency of one alleged agent cannot be shown by the admissions, declarations, and recognition of another agent of the same principal unless the latter be one authorized to make those admissions.
    5. Insurance — Certificate of Authority — Statutes.
    Act No. 84, Pub. Acts 1901, § 2, as amended by Act No. 215, Pub. Acts 1913 (2 Comp. Laws 1915, § 9151), relating to the granting of certificates of authority to insurance agents by the State, does not operate to increase an agent’s authority and to make the principal liable for his representations as to authority.
    6. Same — Evidence—Sufficiency.
    Evidence held, insufficient to show that a person representing himself as an adjuster of defendant insurance company was in fact an adjuster of such company.
    Error to Sanilac; Beach, J.
    Submitted June 22, 1917.
    (Docket No. 123.)
    Decided September 27, 1917.
    Assumpsit by Charles Fisk against the Liverpool & London & Globe Insurance Company, Limited, on a policy of insurance. Judgment for plaintiff on a directed verdict. Defendant brings error.
    Reversed.

      Phillips & Jmles, for appellant.

      Fred A. Fwr. {Charles F, Gates, of counsel), for appellee.
    This is an action on a Michigan standard form insurance policy upon which the premiums had been paid.
    Within the period covered by the policy the property insured was destroyed to an amount equal to or in excess of the amount of the policy. The policy provides that, if a fire occur, the insured shall give immediate notice of any loss in writing to the company. It further provides for a proof of loss which must be rendered to the company. It further provides that no officer, agent, or other representative shall have power to waive any provision or condition ' of the policy, except such as by the terms of the policy may be the subject of agreement indorsed thereon. It is conceded that no proofs of loss were filed by the plaintiff before the commencement of suit.
    It is the claim of the plaintiff that the defendant waived the filing of the proofs of loss and he bases such claim upon his own testimony, which is as follows:
    “I am the plaintiff in the case and the Charles Fisk named in the policy issued by the defendant. I ordered it from Mrs. J. H. Murdaugh, who delivered it to me, and whom I paid. After the fire I had a talk with Mrs. Murdaugh about the adjustment of the loss.

      “Q. Did she tell you that any person was the adjuster on this loss? (Objected to as immaterial and improper, that conversation or statements by local agents do not in any manner confer any authority upon anybody, and that there must be proof that the company sent the adjuster.)

      “The Court: You may take the testimony simply in relation to the manner in which Mr. Fisk got into relation with the adjuster. (Exception by defendant.)

      “A. Mrs. Murdaugh told me who the adjuster was.

      “Mr. Jenks: We object to all testimony of conversations between Mrs. Murdaugh and this witness in reference to the adjuster.

      “A. She said his name was William Phillips, of Port Huron. After that I saw Mr. Phillips.

      “Q. What did Mr. Phillips say to you?

      “Mr. Jenks: It is understood that all this testimony is subject to my objection?

      “The Court: Yes. (Exception by defendant.)
    “Phillips said he came to adjust the loss of both companies, the Liverpool & London & Globe and the fire association. I took him into the room, and he almost immediately denied the right to pay, and said it was a hell of a funny fire and the company would never pay a dollar of the insurance. He asked if I had a bill of sale, and I handed him a bill of sale. Without even seeing my handwriting, he asked if I had written that myself. He took the invoice and inventory and had copies made. The 19th of May he returned again with the deputy fire marshal, Samuel Robinson, and said the company wouldn’t pay a dollar, that it was a hell of a funny fire. Both of these times he admitted of being the adjuster. I also saw him in Port Huron again. I went to Port Huron, and he told me again that the company wouldn’t pay. He told me, ‘You don’t need to loaf around there any more for it.’ The company never sent any other adjuster. All the negotiations for settling this loss were through the adjuster Phillips. * * * After the
    fire I reported it to Mrs. Murdaugh before Mr. Phillips was there, the same one from whom I got the policy and who introduced Mr. Phillips to me as the adjuster. I afterwards visited the State office of the Liverpool & London & Globe Insurance Company, the defendant company, in Detroit, and had a conversation with the person I found in charge. This conversation was since the trial of the other case.
    “Mr. Jenks: We object to any conversation with anybody in the office.
    “I do not remember the date. I had a paper the girl gave me that Will Phillips was the adjuster. I was struck by an auto, and the paper was lost.”

      Another witness testified to the fact that the local agent, Mrs. Murdaugh, told him that the adjuster was Mr. William Phillips. As bearing upon the authority of a local agent, plaintiff’s witness Charles F. Gates testified over objection as follows:
    “That he was attorney at law, and also engaged in fire insurance, and had been for upwards of 30 years. I am familiar with the duties of local agents, and have acted as adjuster for stock insurance companies for several years, and have adjusted many losses for many companies. I am familiar with the duties of a local agent of an insurance company. * * * This is what is known as a recording agency; it is the agent’s duty to represent the company in his immediate vicinity. He issues policies in companies where applications are necessary, receives the application, and receives the money and remits to the company, and in case of loss notifies the company of the loss, watches the property to see that the company’s interests are protected, and when the adjuster comes on the local agent takes him to the assured and introduces him; then the adjuster takes it in his hands. Up to that time it is in the hands of the local agent, not to adjust, but to introduce the adjuster to take the responsibility from the local agent to the adjuster.”
    At the close of the testimony a motion was made on behalf of the defendant for a directed verdict upon the ground:
    “That there is no competent evidence in the case showing that the requirements of filing a proof of loss, which concededly was not done, has ever been waived.”
    This motion was denied, and a verdict was directed in favor of the plaintiff for the face of the policy, with interest.
   Brooke, J.

(after stating the facts). The sole question raised upon this record is whether the acts of Phillips, his statements and admissions, and the assertion of Mrs. Murdaugh, the local agent, taken together, were sufficient to‘support the inference that Phillips was in fact the adjuster for the defendant company. If that fact was sufficiently established, his denial of liability on the part of the company constituted a waiver of the filing of proofs of loss. Popa v. Insurance Co., 192 Mich. 237 (158 N. W. 945); Fisk v. Fire Ass'n, 192 Mich. 243 (158 N. W. 947).

Section 2 of Act No. 84, Pub. Acts 1901, as amended by Act No. 215, Pub. Acts 1913 (2 Comp. Laws 1915, § 9151), is as follows:

“Any insurance company, corporation or association authorized to do business within this State, appointing or employing any agent or person to transact its business within this State, shall at once notify the commissioner of insurance of this State of such appointment or employment, giving the name and business address of such agent or person, and setting forth the kind of business that he is authorized to transact; whereupon the commissioner of insurance shall transmit by mail or deliver personally to such agent or person a certificate of authority, which shall specifically set forth the name of the person so appointed or employed, the name of the company, corporation or association for which he is to act in transacting insurance business, and the particular kind of insurance said agent is authorized to solicit. Said agent’s certificate of authority shall continue in force until the expiration of the annual certificate of authority of said insurance company, corporation or association unless the same is revoked for cause: Provided always, That none of the provisions of this act shall be construed as applying to fraternal beneficiary societies organized or authorized to do business in this State.”

In Weidert v. Insurance Co., 19 Or. 261 (24 Pac. 242, 20 Am. St. Rep. 809), it is said:

“ ‘The declarations of an agent are not evidence of his authority, but the scope and extent of his powers must be determined by his actual authority, or by his acts, and the recognition thereof by his principal.’ 2 Wood on Fire Ins. § 421.”

See, also, 1 Clement on Fire Insurance, p. 49, rule 7, where it is said:

“The authority of an adjuster cannot be established by his own declarations, but may be by his ojvn testimony or inferred from his acts, and recognition by the company, or proved by declarations and admissions of its officers” — citing cases, note 3.

It is elementary that the powers possessed by agents of insurance companies, like those of agents of any other corporations, are not governed by any individual principle, but are to be interpreted in accordance with the general law of agency. A different view may not be applied to a contract of insurance than is applied to other contracts. Quinlan v. Insurance Co., 133 N. Y. 356 (31 N. E. 31, 28 Am. St. Rep. 645).

Generally it may be said that agency cannot be proved by the statements, declarations, or admissions of the agent made out of court, but must be established by tracing its source to some word or act of the alleged principal (1 Mechem on Agency [2d Ed.], § 285) ; “nor can the agency of one alleged agent be shown by the admissions, declarations and recognition of another agent of the same principal unless the latter be one authorized to make those admissions” (Id. § 285, note 81).

In Barry & Finan Lumber Co. v. Insurance Co., 136 Mich. 42 (98 N. W. 761), this court said:

“It has been repeatedly held that an agent’s declarations are not proof of his authority, and that his acts have no significance, unless recognized by the alleged principal in a way to be equivalent to a holding out that the relation of principal and agent exists and a holding out of the requisite authority.”

With reference to the statute quoted supra, this court there said:

“Nor does the statute (2 Comp. Laws, § 7246) operate to increase an agent’s authority, and make the principal liable for his representations as to authority."

The record in the case at bar is barren of evidence tending to show that Mrs. Murdaugh, the local agent, was authorized by her principal to introduce or identify Phillips as the adjuster. It is equally barren of evidence tending to show that any act of Phillips was recognized by the defendant or any of its officers. We are constrained to hold that there was no competent evidence in the case showing that Phillips was in fact the adjuster for the defendant company. It follows, therefore, that his denial of liability did not operate as a waiver of the condition of the policy requiring the filing of proofs of loss.

The judgment is reversed, with costs, and a new trial ordered.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Fellows, JJ., concurred.


source: Caselaw Access Project

author: Brooke, J. Ostrander, J.

license: Public Domain

text:
    BROWN v. HURT.
    Brokers — Fiduciary Relations — Fraud—Forfeiture.
    Where a broker bas been accustomed to invest money for certain persons and to give them advice in real estate ' matters and they only contract to purchase land from other persons on the broker’s assurance that the investment will be profitable and that he will handle the land, which is to be improved, divided into lots and sold for a share in the profits, fiduciary relations exist between the parties, and any right of recovery of compensation for platting and improving the property and endeavoring to market the same upon the ground that the broker was prevented from performing the contract by the opposition of the purchasers is barred by the concealment of the receipt of a commission from the vendor for the sale of the property. Ostrander, J., dissenting.
    Error to Kent; Perkins, J.
    Submitted June 27, 1917.
    (Docket No. 60.)
    Decided September 27, 1917.
    Assumpsit by Chauncey M. Brown against Frank J. Hurt and another for services rendered. Judgment for defendants on a directed verdict. Plaintiff brings error.
    Affirmed.

      Smedley & Linsey, for appellant.

      Clark H. Gleason (Ellis & Ellis, of counsel), for appellees.
    Plaintiff, a real estate dealer, on January 28, 1913, secured the agency for. the sale of 31% acres of land at $250 per acre from Warren Corkins and wife, who executed the following authority:
    “C. M. Brown & Co.:
    “Please book for sale the following property: 31% acres Sec. 10, Wyoming township.
    “Price $7,875.00. Terms % cash, for which I agree to pay a commission of $25.00 per acre, if a sale is effected while your agency continues, or is barred by defect in title or my acts. Your agency to terminate February 11th, 1913.
    “Warren Corkins.
    “Mrs. Laura Corkins.”
    Shortly thereafter he brought this property to the attention of defendants, with the result that the defendants purchased the property from Mr. and Mrs. Gorkins upon land contract on or about February 4, 1913. Upon the same date defendants entered into a contract with plaintiff in the following terms:
    “This agreement made and entered into this 4th day of February, A. D. 1913, by and between-Frank J. Hurt and Caroline Hurt, his wife, parties of the first part, and C. M. Brown, party of the second part, all of the city of Grand Rapids, county of Kent, and State of Michigan, witnesseth:
    “1st. Said first parties hereby agree to purchase 31 acres of land on section ten (10) Wyoming township, on the terms and conditions of a certain land contract this day executed by Warren Gorkins and Laura Cor-kins, his wife, to said first parties.
    “2d. Said first parties hereby agree to pay bills for the improvement of said land, such as platting of the same into lots, grading of streets, laying of sidewalks, drainage, and advertising, as may from time to time be presented to them, when O. K.’ed by said second party, to the amount of not less than two thousand ($2,000) dollars, or more, at the discretion of the said first parties.
    “3d. Said first parties hereby agree to sign all contracts or deeds presented to them by said second party for sale of lots and said land, providing, however, such sale shall be for an amount and on terms satisfactory to said first parties.
    “4th. Said first parties further agree that after they have received in full the amount of money invested in purchase price, improvements, drainage, advertising, or for any moneys expended for the improvements of said land, together with interest on the same in full, at the rate of six per cent, per annum, then, that is to say, after the payment of all said above sums, said first parties shall contract or deed, as may be, an undivided half (%) interest in whatever lands there may be left, together with half (%) interest in all moneys due said first parties in consequence of unpaid amounts due or to become due for lands sold from said above description as payment in full for all services rendered.
    “5th. Said second party hereby agrees to contract for, oversee, and look after the platting, laying of streets, sidewalks, drainage, and all other improvements that may be necessary or may be required of said first parties in order to prepare the land in the best possible shape for quick sale and to render bills for all such work to said first parties for their approval and payment.
    “6th. Said second party further agrees to put forth his very best efforts in the sale of said lots, to use every honorable means to dispose of and make the most possible money from said land, and to turn over to said first parties all moneys received by him in any way through the sale of said lands, and to accept in full for all services, an undivided half (%) of the net profits from the sale of said land, after all the purchase price, moneys expended for improvements, and all interests at the rate of six per cent, per annum'on all moneys invested, have been paid in full to said first parties.
    “In witness whereof, we have this day. first above written, set our hands and seals.
    “Frank J. Hurt. [Seal.]
    “Caroline Hurt. [Seal.]
    “C. M. Brown. • [Seal.]”
    The record shows clearly that defendants refused to entertain the proposition unless plaintiff would handle the property for them. Touching the sale to defendants plaintiff testified:
    “I first learned the Corkins had’ this land for sale through Mr. Wolford. They were tendering him a contract for $225 an acre I think. Dr. Wolford came to me to go out and see the land. I went out there with him in an automobile, and looked the property over. It was perhaps two weeks after that I saw Mr. and Mrs. Hurt. I found out the doctor was not going to take it by talking with him. . Before that time I had been handling money for Mr. and Mrs. Hurt. I couldn’t tell exactly how long; probably three or four years. I don’t know I had any way of knowing they had money they could invest, except what I learned by loaning for them.

      “Q. How did you come to go~and see the Hurts about buying this property?

      “A. I went to see them, as I naturally would anybody that I thought might be interested in making an investment. They had already been to me, and talking about investment; I had been with them to see some properties that they were talking of investing in. I went for one place in particular to see the Keeley Institute on College avenue and looked it over with them.

      “Q. When they came to you, they came to you to advise them at that time?

      “A. I think so.

      “Q. Owing to the confidential relations that existed at that time between the Hurts and yourself?

      “A. Yes, sir. I can’t tell which I saw first Mr. or Mrs. Hurt. I presume likely I went to their house. I don’t know whether I went to their house, or whether one of them might have been in the office when I first mentioned it to them. I saw them either at the office or at the house, and asked them if they would not consider buying such a piece of property as that; and, after talking it over with them, telling them exactly what it was, they said they would go down with me and look at it, which they did. I simply told them that there was 31 acres down there that could be bought for $250 an acre, and that I thought it was reasonable, and that I thought it could be platted and some money made off from it.

      “Q. Did you tell them in your conversation with them that Dr. Wolford had just turned it down at $225 an acre?

      “A. I did not; no, sir.

      “Q. Did you tell them that you had a contract to sell it, and that if you sold it you would get $25 an acre for selling it?

      “A. I did not; no, sir.

      “Q. Did you tell them you had an option on it?

      “A. I told them that I had a contract on it for to sell it, if I could sell it within two weeks, for so much money.

      “Q. You had an option on it if you could sell it within that time?

      “A. Yes.

      “Q. And told them that the option you had’ was $7,500?

      “A. Yes, sir; $7,750.

      “Q. $7,750?

      “A. Yes, sir. I took them down to see it — I think both of,them'. I don’t just remember the weather at that time; there might have been a very little snow on the ground. There was not very much, if any; I don’t remember about it. I told them I considered it cheap at $250 an acre. I made this contract for the Corkins and I made my contract. These contracts are both made and dated the same day, but the agreements were not made on the same day.

      “Q. Did they ever agree to take that place at all until you agreed what you would do with it if they would take it?

      “A. Yes, sir; they agreed to take the place, but they wanted me to handle it.

      “Q. That was one of the conditions you held out to them that you could sell it and make a large amount of money for both of you, didn’t you, to get them to buy that place?

      “A. I held out that I thought it could be sold for a good, big profit; yes, sir, I think so yet. .

      “Q. Why didn’t you tell them that you were interested to the extent of $25 an acre in the sale of it?

      “A-. When I go to sell a man a piece of property, I don’t tell him that I am going to get a commission on it, the first thing I tell him. That would be a very poor business.”
    In accordance with the terms of the contract between plaintiff and defendants, plaintiff undertook to and did plat and improve said property and endeavored to sell the same. In this respect plaintiff was unsuccessful, although he handled the property for something like years. At the time of the trial in the court below the learned circuit judge found that defendants had expended in buying and improving said property the sum of $13,740, and had received from the sale of the lots and the sale of gravel found upon some of the lots, $1,553, leaving a net investment on the part of defendants of $12,187. Most of the lots sold by the plaintiff upon land contract were abandoned by the purchasers. In the spring or summer of 1914 a difference arose between plaintiff and defendants with, reference to the sale of the gravel from the subdivision, defendants apparently objecting thereto upon the ground that such sale would militate against the sale of the balance of the subdivision for residence purposes.
    It is plaintiff's claim that he was prevented from performing his contract according to its terms by the unreasonable opposition of the defendants, whereas defendants claim that at all times they have been anxious to have plaintiff sell the lots, and have even advised him of their willingness to accept a loss if he could dispose of the property. About a year later plaintiff started this suit, in which he seeks to recover, not his share of the profits of the transaction under the contract, because it is obvious there are no-profits, but compensation at $20 per day for 281 days’ time which he alleges he spent in and about the platting and improving of the property and endeavoring to market the same. To this declaration defendants filed a plea of the general issue, with a notice thereunder to.the effect that they had been induced to enter into the contract through the false and fraudulent representations of the plaintiff; that he had utterly failed to perform his part of the agreement by reason of which defendants had sustained damages to a large amount, which they asked to have certified in their favor.
    Upon the trial the learned circuit judge directed a verdict in favor of the defendants upon the ground that plaintiff sustained toward defendants in the transaction a trust relation or agency which required him to exercise in his dealings with the defendants the fullest fairness and frankness; that plaintiff’s concealment of the fact that he received $775 of defendants’ money as a commission for the sale of the lands was essentially fraudulent, and would operate to prevent recovery, citing the case of Friar v. Smith, 120 Mich. 411 (79 N. W. 633, 46 L. R. A. 229). From judgment entered in accordance with said direction plaintiff appeals; the only error assigned or argued being that the court erred in directing a verdict in behalf of defendants and refusing to allow the case to go to a jury.

       On the question of fraud and secret dealings of real estate broker as affecting compensation, see comprehensive note in 45 L. R. A. 33; 24 L. R. A. (N. S.) 659; 34 L. R. A. (N. S.) 1047.

   Brooke, J.

(after stating the facts). We are of opinion that the learned trial judge made a proper disposition of this case. The record quite clearly demonstrates that the defendants were people of modest means and limited experience in business affairs. The husband had for many years worked as a wood carver in one of the Grand Rapids furniture factories, and had through economy accumulated a small amount of money, which he from time to time invested through the agency of the plaintiff. Plaintiff himself testified that defendants came to him for advice because of the confidential relations that existed between them and him. It is further clear that defendants’ original determination not to undertake the investment was changed only upon the assurance of the plaintiff that he would become jointly interested with them in the profits of the transaction, which he told them would be large, and which they understood would be realized only upon his participation in the deal. / Although the contract between defendants and Corkins (husband and wife) was dated the same day as the contract between plaintiff and defendants, the latter was executed first. It is .clear that defendants regarded both contracts as part of the same transaction in which plaintiff was jointly interested with them. There can be no doubt that through the entire transaction involving the purchase of the land by the defendants the plaintiff acted as their agent, that he sustained toward them a fiduciary relationship, and thus became charged with the duty to deal fairly with them. This he concededly did not do. In the case of Barrett v. Miller, 144 Mich. 454 (108 N. W. 396), this court said:

“Whether complainant be treated as an associate with defendants in the purchase of lands or a broker to invest their money, his-relations were, in either case, fiduciary in character, requiring him to deal openly and truthfully with defendants.”

See, also, Leathers v. Canfield, 117 Mich. 277 (75 N. W. 612, 45 L. R. A. 33); Friar v. Smith, 120 Mich. 411 (79 N. W. 633, 46 L. R. A. 229); Woods v. Palmer, 151 Mich. 30 (115 N. W. 242) ; McNair v. Parr, 177 Mich. 334 (143 N. W. 42); Kirby-Sorge-Felske Co. v. Doty, 190 Mich. 553 (157 N. W. 273).

The judgment is affirmed.

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

Ostrander, J.

(dissenting). It is not improbable, but it is not certain, that the jury would have reached a conclusion upon the facts very much like the one declared by the court. I do not find in the record, or briefs, any support for the statement that plaintiff concedes that he did not deal fairly with the defendants. I cannot escape the conclusion that a question of fact, and not of law, is involved, and that the plaintiff is entitled to the judgment of a jury.


author: Brooke, J.

text:
    GRAND RAPIDS TERMINAL BELT RAILWAY CO. v. WATERS. SAME v. PERE MARQUETTE RAILROAD CO.
    1. Railroads — Tracks—Sidetracks.
    Railroad companies are not required to build or maintain tracks to private industries, nor to furnish, the right of way or rails by which the traffic of a private industry reaches their lines.
    2. Same — Implied Contracts — Use op Tracks.
    Where the president of a cement company constructs a belt line railroad for transfer purposes which is intended for the use of the company and other industries that may be located and organizes a corporation to take over the railroad and owns all the stock therein, except qualifying shares, and cars are transferred to and from such plant only by engines of connecting railroads, there is no implied contract by the railroads to pay for the use of the line, demands for payment being met with refusal or with conduct tantamount thereto.
    Error to Kent; Lamb, J., presiding.
    Submitted June 25, 1917.
    (Docket Nos. 72, 73.)
    Decided September 27, 1917.
    Assumpsit by the Grand Rapids Terminal Belt Railway Company against Dudley E. Waters and another, receivers of the Pere Márquette Railroad Company, and against the Pere Marquette Railroad Company for trackage service. By stipulation the cases were tried as one. Judgment for defendants. Plaintiff brings error.
    Affirmed.

      Kleinhans, Knappen & Uhl, for appellant.

      John C. Bills (Norris, McPherson, Harrington & Waer and Seward L. Merriam, of counsel), for appellees.
   Brooke, J.

The issue in these two cases was tried by the court without a jury, who made the following findings of fact and conclusions of lav/:

“Findings of Fact.
“The plaintiff is a Michigan corporation, having been organized under and by virtue of our laws in the month of December, 1905. The defendant, the Pere Marquette Railroad Company, is a corporation, and a recognized common carrier in both intra and interstate commerce.
“Early in the year 1905, the Acme Cement Plaster Company completed its Grand Rapids plant. This plant is located about 1% miles from the main tracks of the Pere Marquette and Lake Shore railroads. This, location of the plant was necessary, because the gypsum deposit on which it was to operate was discovered here. At the time the plant was completed, desiring railway shipping facilities, the Acme Cement Plaster Company made application to the Pere Marquette and Lake Shore railroad companies for tracks to its plant. The railroads declined to build the track applied for at their own expense. The Acme Cement Plaster Company at the time was without funds with which to do it.
“In March, 1905, Samuel Lazarus, a large stockholder in the Acme Cement Plaster Company, and now its president, acquired the right of way for a track from the main line of the Pere Marquette and the Lake Shore railroads to the west line of the property of the Acme Cement Plaster Company. Subsequently thereto, and during the years 1906 and 1907, other right of way was purchased from the Acme Cement Plaster Company and from other parties, which furnished in all a right of way from the Lake Shore and Pere Marquette railroads to the Acme plant, and extending beyond said plant a distance of miles. The title thereto was taken in the name of Samuel Walker, the then vice president of the Acme Cement Plaster Company. Mr. Lazarus furnished the money to buy the right of way, and Walker, in taking the title, was acting as trustee for Mr. Lazarus. In the summer of 1905 Mr. Lazarus employed the Lake Shore Railroad Company to build the track from its main line to the plant of the Acme Cement Plaster Company, except the part where it touched the Pere Marquette Railroad Company property, for which construction he paid the Lake Shore Railroad. Company the sum of approximately $11,000. The tracks were not laid on the balance of the right of way acquired during the years 1905 to 1907, due to lack of funds and to the fact that no other industries had located along the right of way.
“The immediate object in the mind of Mr. Lazarus in procuring this right of way and causing the track to be constructed was to connect the Acme Cement Plaster Company’s plant with the aforesaid railroads. His ultimate object, as he testifies, was the organization and construction of a belt line railroad encircling the city, sufficient to connect with the Pere Marquette and Lake Shore, and finally with the other lines of. transportation entering Grand Rapids. Surveys were made of the proposed route, and nearly all of the right of way purchased, together with about 320 acres of lands for factory sites; all purchased with funds furnished by Mr. Lazarus. All conveyances were taken in the name of Samuel Walker, who took title as trustee for Mr. Lazarus. Up to the present time the only track laid is that leading from the Pere Marquette and Lake Shore railroads to the plant of the Acme Cement Plaster Company,- and the Acme Cement Plaster Company is the only concern now served thereby ; no other plant having been located on these tracks. The original plan has not been abandoned. The plaintiff company is endeavoring to secure other industries to locate on its right of way, and is offering free industrial sites. No track has, however, been built since 1905, and no industries, except the Acme Cement Plaster Company, have located on the track that was built.
“In December, 1905, at the instance of Samuel Lazarus and others, the Grand Rapids Terminal Belt Railway Company was organized, and later the right of way and track, held by Mr. Walker as trustee, was conveyed to it. The plaintiff now has title to the right of way and track which serves the Acme Cement Plaster Company, except that portion of it on land owned by the Plaster Company adjacent to the warehouse, and as to that the plaintiff is possessed of an easement in the right of way and owns the rails. This track has been kept in repair at the expense of the plaintiff company since it was acquired. The funds therefor were borrowed from Mr. Lazarus, and the amount so expended has reached the sum of $5,300. The receivers of the Pere Marquette Railroad Company made repairs to the tracks of the plaintiff at different times, and on October 25, 1915, sued the plaintiff and the Acme Cement Plaster Company for such repairs. The receivers’ bill for such repairs was $274.51, and before the case came to trial this amount was paid by the plaintiff company and the case dismissed.
“The plaintiff company maintains no office in this State, other than the office of Edward H. Christ, in the city of Grand Rapids, president of the plaintiff company, and employed by the plaintiff company to look after its interests. Mr. Christ draws from the plaintiff a salary of $25 a month. He formerly held the title of chief engineer of the plaintiff company, at a salary of $100 a year, and his principal duties have been to look after the necessary repairs to said tracks, and to check up the details of the repair bills rendered by the railroads for keeping this track in shape and to endeavor to sell factory sites along the track. He is a civil engineer, and maintains in Grand Rapids an office for the general practice of that profession. Plaintiff company’s affairs are handled from St. Louis, Mo. Its only means of information relative to the use of the track by the Pere Marquette and Lake Shore Railroads is the bills of lading made out by the Acme Cement Plaster Company.
“The plaintiff has no rolling stock, maintains no stations, carries no passengers, receives, no freight, and dispatches none — originates no traffic of any kind. It is in no sense a common carrier and has not pretended and does not now pretend to be such. Since the track was put in, in 1905, the Pere Marquette Railroad has used it in going in and placing empty cars for the Acme Cement Plaster Company and in taking them out when loaded, at the instance of the Acme Cement Plaster Company. No express agreement was ever entered into or any understanding had between the plaintiff and the Pere Marquette Railroad Company, or the receivers thereof, regarding the use of the said track or pay for the same.
“Since July, 1905, the Pere Marquette Railroad has taken 2,876 cars of freight over the track in question from and for the Acme Cement Plaster Company. Of that number, 1,600 were taken out before the railroad was placed in the hands of the receivers, and 1,323 were removed more than six years prior to the commencement of this suit. From the record it appears that the plaintiff company, on the 31st day of December, 1907, sent a statement to the Pere Marquette Railroad Company, asking pay for the use of said track. This demand was refused by letter of March 7, 1908, in which the following paragraph appears: ‘We are unable to locate any agreement between this company and the Grand Rapids Terminal Belt Railroad Company, covering the use of tracks and switching service at Grand Rapids. I wish you would give reference to date of contract covering the switching, or, if same is covered by tariff, authority' specifying number covering it.’
“On the 25th day of March, 1908, the defendant wrote á letter to the plaintiff company, in which the following paragraph appears:
“ ‘When you have complied with, my request, ’’and show authority for this trackage, I will be pleased to render voucher in your favor at our earliest convenience.’
“Nothing further was said or done by the plaintiff until October 6, 1909, when it sent a second written notice and itemized statement of its claimed account. To this communication the defendant, on the 18th day of October, 1909, replied as follows:
“ T do not see how we can recognize any such bill in absence' of a filed tariff. The Belt Railroad performs no service whatever for originating the traffic, and under all the existing conditions we would have to decline payment, if bill is presented.’
“In 1910 or 1911, Mr. Lazarus had the matter up with Mr. Cotter, president of the Pere Marquette, in a personal interview, but Mr. Cotter simply referred him to some one else, and so nothing came of it.
“All of the corporate stock of the Grand Rapids Terminal Belt Railway Company, except sufficient shares, to qualify the required number of directors, is held in the name of Samuel Lazarus. He was likewise president of the company up to 1916. He is also president of the Acme Cement Plaster Company, and he and his immediate family own $425,000 of the $1,000,000 capital stock of that company. C. H. Sommer, secretary of the plaintiff company, is an officer of the Acme Cement Plaster Company, and owns one share of stock in said Acme Cement Plaster Company.
“The Acme Cement Plaster Company itself owns none of the stock in the plaintiff company, and has not paid any of its bills, or loaned it any money to construct the road or repair the track. Neither does the Acme Cement Plaster Company exercise any control over the plaintiff company, and no part of the sum claimed for trackage, if recovered, would be turned over to the Acme Cement Plaster Company.
“The Acme Cement Plaster Company does not own the lands adjoining the right of way of the plaintiff company on which tracks are located, other than those lands adjoining that part of the tracks located on the Acme Cement Plaster Company’s property. Two hundred acres of land adjoining plaintiff’s tracks are owned by the plaintiff company.
“The plaintiff demands from the defendant in this suit and from the receivers in the other suit $1 a car for every car that has been moved by the defendant to and from the plant of the Acme Cement Plaster Company. This, in my judgment, would be a reasonable charge therefor. The total claim against the Pere Marquette Railroad Company for trackage service, not barred by the statute of limitations, is $277, and the total against the receivers of the Pere Marquette Railroad Company is $1,276.
“The total number of cars moved by the Pere Marquette Railroad Company after the notice that payment would be demanded, dated December 31, 1907, is 759 cars, and the total number of cars moved by the receivers after this notice is 1,276 cars. Of the 759 cars, moved by the Pere Marquette Railroad Company, all but 277 are barred by the statute of limitations. No demand for payment of any of these charges was ever made upon the receivers of the Pere Marquette Railroad Company until the demand which immediately preceded the bringing of these suits.
“Conclusions of Law.
“I. Under the testimony in this case, the track in question is a plant facility of the Acme Cement Plaster Company, within the reasoning of the following cases: In the Matter of Transportation of Suit from Hutchinson, Kansas, 10 Interst. Com. Com’n, 1; Crane Iron Works v. United States, 209 Fed. 238; Delray Connection Railroad v. Railroads, vol. 3, No. 2, Orders and Opinions of Mich. Railroad Com. page 80. In re Chesapeake & Curtis Bay Railroad Company, Public Utilities Reports 1915F, page. 346.
“II. Being a plant facility, any division of the through freight charges, by whatever name it might be called — trackage services or switching charges— would be, in effect, a rebate, and in contravention of the law.
“III. Under the facts found in this case, there can be no recovery based upon an implied contract. Our own court of last resort has so often applied the well-settled doctrine in relation to implied contracts that it is fruitless to go outside of the State for authority. Judge Stone, in the case of McCain v. Smith, 172 Mich, at page 10 (137 N. W. at page 620), sums up the doctrine as follows:
“ ‘It is a familiar doctrine that neither an express contract, nor one by implication, can come into existence, unless the parties sustain contract relations; that, to constitute either the one or the other, the parties must occupy towards each other a contract status, mutuality of will and interaction of parties, generally expressed, though not very clearly, by the term “privity.” Without this a contract by implication is quite impossible.’
“In the old case of Woods v. Ayres, 39 Mich. 345 (33 Am. Rep. 396), it was held that the ‘privity’ essential to a contract must proceed from the will of the parties. It is inconceivable that there could be any privity or mutuality of will between the parties to this suit, at least after the claim first sent, in December, 1907, had been refused on the ground that no contractual relations existed. Surely the law will not imply such privity or mutuality of will, and use it as a basis of recovery for that portion of the claim, at least, which accrued subsequent to the express declaration of the defendant that no such privity or mutuality exists. Pursuing the question from the angle that the claimed services were performed by the plaintiff with the expectation, at the time such services were performed, that they would be paid for by the defendant and that the defendant was charged with notice thereof, we are again confronted by the very basic principle of contracts — mutuality of will, meeting of minds, privity, it will hardly be claimed, much less argued, that whatever services were performed, after the express declaration of the defendant repudiating any contractual relations between it and the plaintiff, were performed by the plaintiff under the implication of á promise on the part of the defendant to pay what it had already expressly refused to pay.
‘TV. As I view it, the claim of the plaintiff is not what the law would consider a ‘running account.’ That being the case, all items charged prior to six years before the commencement of this suit would be barred by the statute of limitations.
“V. In my view of the law, as applied to the facts in these cases, judgment should be entered for the defendant in both; and it is so ordered.”

Plaintiff, appellant, filed exceptions to each of the four conclusions of law. From the findings of fact, to which no exception is taken, it appears that early in 1905, upon the completion of the Acme Cement Plaster Company, application was made by said company to the Pere Marquette and Lake Shore Railroads for tracks to its plant. This application was refused by both roads, and, as access to railway transportation was absolutely necessary to the life of the plaster company, Mr. Lazarus, its largest and probably controlling, though not majority, stockholder, undertook to provide the necessary track. He acquired the right of way and paid for the building of the road. Late in the year 1905, he organized a corporation (the plaintiff), which became the owner of all his rights, and of which he was the sole stockholder, except as to qualifying shares. Over the track so constructed the defendant operated in delivering cars to and receiving cars from the plaster company. This practice continued for something over two years, until December, 1907, when a demand was made upon the defendant for pay for the use of this trackage. Payment was refused, and a second application was made in October, 1909, which was again refused. Thereafter, in 1910 and 1911, some further negotiation was had between Mr. Lazarus and the then president of the defendant company; but it is not claimed by the plaintiff that the defendant at any time ever agreed to compensate plaintiff for the use of the tracks, and it affirmatively appears that at least on two occasions it refused so to do.

Under the undisputed facts in the case, we find it unnecessary to discuss conclusions of law numbered 1 and 2; preferring to base our decision in the case upon conclusion 3. It is settled law in this State that railroad companies are not required to build or maintain tracks to private industries, nor to furnish the right of way or rails by which the traffic of a private industry reaches their lines. Grand Rapids, etc., R. Co. v. Michigan Railroad Commission, 183 Mich. 383 (150 N. W. 154) ; 1 Wyman on Public Service Corporations (Ed. of 1911), §§ 820, 821. It is not claimed by the plaintiff that any express contract exists between it and the defendant to pay for the use of the tracks connecting the defendant railway with the plaster company’s plant. It seems to us clear that no contract to make such payment can be implied under the conceded facts in this case. Each demand for payment made by the plaintiff upon the defendant was met by a refusal, or by conduct which amounted to a refusal. Under such a state of facts, the law can never imply a promise to do that which in express terms has been refused. Franck v. McGilvray, 144 Mich. 318 (107 N. W. 886). See, also, McCain v. Smith, 172 Mich. 1 (137 N. W. 617). The fact that the service rendered, for which suit was brought (i. e., the use of the connecting track), is of incidental benefit to defendant, is not controlling. It was primarily built for the benefit of the plaster company, whose duty it was, under the law, to furnish its own connection with the tracks of the defendant company.

The plaintiff at the present time is in no sense a. common carrier, nor is its demand predicated upon the assumption that it is such; it not having filed any tariff with the railroad commission. The claim is based upon the fact that the plaintiff is the owner of the facility created by it for the benefit of the plaster company, whose principal stockholder is the sole owner of the plaintiff, and whose duty it was to itself construct the facility. The use of such a facility by the railroad company for the furtherance of the plaster company’s business, with the consent of the plaintiff,- in the absence of any express contract, or of conduct on the part of the defendant from which privity or a will to contract might be implied, imposes no obligation upon the defendant.

The judgment is affirmed.

Kuhn, C. J., and Stone, Ostrander, Bird, Moore, Steere, and Fellows, JJ., concurred.


author: Fellows, J. Ostrander, J.

text:
    SAIER v. JOY.
    1. Nuisance — Undertaking Establishment — Injunction.
    The maintenance of an undertaking establishment and morgue in a residential section of a city, although not a nuisance per se, may be enjoined by nearby apartment owners where it will cause depression to the normal person, lower his vitality, render him more susceptible to disease, and deprive his home of the comfort, repose and enjoyment to which he is entitled, and he will sustain substantial financial loss, because of the depreciation in value of his property, and there is a strong probability that he will be disturbed by noxious odors due to the use of formaldehyde in the summer months when the windows are open.

    2. Same.
    The writ of injunction is not one of right, but of grace. It should not issue out of hand, but should issue in cases where the right to such relief is clearly established.
    Appeal from Ingham; Collingwood, J.
    Submitted June 27, 1917.
    (Docket No. 62.)
    Decided September 27, 1917.
    Bill by William Saier and others against William H. Joy and another to enjoin the maintenance of an undertaking establishment in a residential neighborhood. From a decree dismissing the bill, plaintiffs appeal.
    Reversed, and decree entered for plaintiffs.

      L. B. Gardner and O. J. Hood, for plaintiffs.

      Cummins & Nichols (William M. Smith, of counsel) , for defendants.

       On the question as to whether an undertaking establishment may be considered a nuisance, see note in 31 L. R. A. (N. S.) 608.

   Fellows, J.

Townsend street, in the city of Lansing, is one of the principal residence streets of the city, and extends south from the Capitol grounds to Main street, a distance of about half a mile. In the second block south from the Capitol grounds, and on the west side-of the street, is located the apartment house owned by plaintiffs William and Jessie E. Saier. It is worth approximately $30,000, consists of six apartments, one of which is occupied by Mr. and Mrs. Saier for their home; the balance being occupied by tenants. Adjoining this property on the north is the property of the defendants, known in the record as the Lantz property. Immediately north of the Lantz property is the property and home of plaintiff Flora Johnson. All the houses on these three pieces of property front on Townsend street. In the rear of the Johnson property, and fronting on Washtenaw street, is the property of plaintiff Emma Quarmby, which extends to the Lantz property in the rear. Due to its nearness to the capitol, the property of all the plaintiffs is valuable for use by tenants and roomers. Prior to the purchase of the Lantz property by the defendants, it was used solely for residential purposes; the house being a two-story brick in front, with frame part in the rear. The defendants are undertakers, and prior to their purchase of the Lantz property conducted their business in the business part of the city. They purchased the Lantz property for the purpose of there establishing their business, including the maintenance and conduct of a morgue. On learning this fact plaintiff Saier and others protested. The protest being unheeded, this bill was filed for injunctive relief. Upon the hearing a large number of witnesses, both expert and lay, were sworn and at its conclusion the bill was dismissed.

It is the claim of the plaintiffs, stated without unnecessary detail, that the value and desirability of their property will be materially decreased by the maiiitenance of defendants’ business at the Lantz property; that there will be great danger from infectious and communicable disease from the bodies of persons dying therefrom taken to defendants’ morgue; that disagreeable and noxious odors will permeate the neighborhood; that bodies will be taken there for autopsies and embalming; that bodies of persons meeting accidental death, and the unknown dead, will be taken there and left for some time pending identification; that funerals will be there conducted, and that there will be a frequent coming and going of hearses and dead bodies; that it will create such a constant reminder of death as to depress plaintiffs, their tenants and roomers, rendering them less able to resist disease, and, under the circumstances, rendering the conduct of the business in that location a private nuisance, which should be abated by a court of equity at the suit of an interested property owner.

On the part of the defendants it is insisted that they have for .a great many‘years engaged in their business; that they are licensed embalmers, and always have conducted, and will in the future conduct, their business in accordance with the rules of the State board of health, in a sanitary manner; that bodies of persons dying from communicable disease, other than tuberculosis and typhoid fever, will not be taken to their establishment; that there is no danger to the health of adjacent occupants from these diseases, or from the handling of any other bodies that may be brought there; that no noxious or disagreeable odors will escape the premises; that they purpose to tear down the frame part of the building and erect a brick part for their morgue and business on strictly sanitary lines; that the part of the house fronting on the street will have the appearance of a residence, that the funerals will be infrequent, and that the conduct of their business will in no way depress the normal person; that the maintenance' of a morgue and their business is not a nuisance per se; that it is not, under the circumstances of the case, a nuisance; that both the injury and the damages claimed are purely speculative; and that in a large number of the cities of the State funeral establishments and morgues are located in residential districts.

We are satisfied from the evidence in the case that the value of the plaintiffs’ property would be materially decreased by the maintenance of defendants’ business at the Lantz property. Many witnesses were called by the plaintiffs on this subject, and the testimony in opposition is very meager. We are convinced that such depreciation in value would be substantial, ranging from one-quarter to one-third of the value. This damage would be actual, and not visionary or speculative.

We do not find the claim of plaintiffs that there is danger of disease being communicated from dead bodies in the morgue-to those living in adjoining houses is sustained. The defendants have been in the undertaking business for many years. There is in the entire record no intimation but that they have always conducted their business in a healthful and sanitary manner, in accordance with the rules of the State board of health, and the record satisfies us that, when so conducted, the danger, if not entirely removed, is infinitesimal. The proofs show and are uncontradicted that no bodies of persons dying from communicable disease, other than tuberculosis and typhoid fever, would be taken to the morgue. Some stress is laid on the tuberculosis cases. But we are satisfied from the record, that, notwithstanding the lay opinion of this dread disease, there is no danger of its communication from a dead body to persons in adjoining houses, where proper precautions are taken in accordance with the regular method of embalming. Physicians seem to agree that not only have decidedly advanced steps been taken in its treatment, but also in prevention of its spread.

We are not so well satisfied that noxious odors will not escape defendants’ premises. Formaldehyde is extensively used by them in embalming, deodorizing, and sanitation. The more thorough and complete the sanitation, the more formaldehyde is used. It gives off a pungent odor, and it is quite doubtful to our minds that this odor would fail to reach adjacent houses, situated as close as these houses, especially in the summer time, when the plaintiffs would expect to have, and have a right to have, their windows open. The Saier apartments are within 13% feet of the house on the Lantz property, and there are 25 windows on the north side. The Johnson and. Quarmby houses are very close to thes line, and have numerous windows facing the Lantz house.

The defendants have failed to convince us that undertaking establishments with morgues are located in other cities in the strictly residential districts. While testimony tending to support such claim appears in the record, the testimony in rebuttal is persuasive that such establishments either border on, and are close to, business sections, or are in locations where the residential character of the district is giving away and business is breaking in.

The argument revolved quite largely around the question of whether the maintenance of an undertaking establishment and morgue in close proximity to a home would so affect the normal mind as to render its maintenance in a strictly residential district, such as this district is, a private nuisance, and as such abatable by a court of equity. Much testimony, both professional and lay, upon this subject was taken. Whether this may be the subject of opinion evidence is a mooted question. We think it requires no deep research in psychology to reach the conclusion that a constant reminder of death has a depressing influence upon the normal person. Cheerful surroundings are conducive to recovery for one suffering from disease, and cheerful surroundings are conducive to the maintenance of vigorous health in the normal person. Mental depression, horror, and dread lower the vitality, rendering one more susceptible to disease, and reduce the power of resistance. There is an abundance of testimony in this record confirmatory of this, and it is a matter of common knowledge. The constant going and coming of the hearse (defendants in 11 months had 269 funerals); the not infrequent taking in and out of dead bodies; the occasional funeral with its mourners and funeral airs, held in the part of the house designed for a chapel; the unknown dead in the morgue, and the visits of relatives seeking to identify them; the thought of autopsies, of embalming; the dread, or horror, or thought, that the dead are or may be lying in the house next door, a morgue; the dread of communicable disease, not well founded, as we have seen, but nevertheless present in the mind of the normal layman — all of these are conducive to depression of the normal person; each of these is a constant reminder of mortality. These constant reminders, this depression of mind, deprive the home of that comfort and repose to which its owner is entitled.

We cannot overlook the right to engage in a lawful trade, nor the fact that the conduct of the undertaking business is not only lawful, but highly necessary, nor that it is not a nuisance per se. Nor can we overlook the right of the citizen to be protected in his home, and his right to the enjoyment there of that repose and comfort that are inherently his. The question here is not the restraining of defendants’ business, but the restraint of its intrusion into a long-established and strictly residential district. The cases directly in point are meager. The industry of counsel, and such investigation as we have been able to make, disclose but two: Westcott v. Middleton, 43 N. J. Eq. 478 (11 Atl. 490); Densmore v. Evergreen Camp, No. 147, 61 Wash. 230 (112 Pac. 255, 31 L. R. A. [N. S.] 608, Am. & Eng. Ann. Cas. 1912B, 1206).

In the New Jersey case the injunction was refused, and the bill dismissed. We are not impressed that the opinion in that case makes clear that the locality involved was exclusively residential in character. From the opinion it does appear that a portion of complainant’s house was occupied for business purposes, and defendant had been conducting his business for 11 years in its then present location, which is spoken of as a “populous part” of the city, and the case seems to turn quite largely on the question of whether the business of an undertaker is a nuisance per se. The complainant in that case appeared to have been of a supersensitive temperament, while the rights of the parties should be measured by that which affects the normal person — not the supersensitive, on the one hand, or the hardened, inured, on the other.

In the Washington case the injunctive relief was granted, not upon the ground that the undertaking business is a nuisance per se, but that by reason of its location it might be or become one, and the right to injunctive relief to restrain the conduct of a business, not a nuisance per se, but one by reason of its location and surrounding conditions, is clearly pointed out; the court saying:

“For in this age, when population is becoming more and more congested in the cities, it would be manifestly unfair to grant injunctive relief only in those cases where the object attacked' was a nuisance per se, when other circumstances or conditions intervene which might tend to destroy the repose and comfort of a part of a city or town given over to homes. In this case, as in that, the element of comfort and repose in the enjoyment of the home becomes an essential element of our inquiry. For it is not only shown by the evidence, but it may be accepted as within the common knowledge of man, that the immediate presence of those mute reminders of mortality, the hearse, the chapel, the taking in and carrying out of bodies, the knowledge that within a few feet of the windows of one’s dwelling house, where the family sleep and eat and spend their leisure hours, autopsies are going on, that the dead are there, cannot help but have a depressing effect upon the mind of the average person, weakening, as the testimony shows, his physical resistance, and rendering him more susceptible to contagion and disease.”

And the following language from Ross v. Butler, 19 N. J. Eq. 294 (97 Am. Dec. 654), was quoted with approval:

“The law takes care that lawful and useful business shall not be put a stop to on account of every trifling Or imaginary annoyance, such as may offend the taste or disturb the nerves of a fastidious or over-refined person. But, on the other hand, it does not allow any one, whatever his circumstances or condition may be, to be driven from his home, or to be compelled to live in it in positive discomfort, although caused by a lawful and useful business carried on in his vicinity. The maxim, ‘Sic utere.tuo ut alienum non Isedas,’ expresses the well-established doctrine of the law.”

We are persuaded that the correct result was reached and the proper rule announced by the Washington court. Nor are we able to distinguish in principle the instant case from the recent case of Barth v. Hospital Ass’n, 196 Mich. 642 (163 N. W. 62). That case was brought to restrain the erection and maintenance of a private insane asylum in a strictly residential district. There, as here, it was contended by the defendants that the maintenance of such an institution was not a nuisance per se; that the injury alleged was speculative and imaginary. There, as here, it was claimed by the plaintiffs that the maintenance of the institution would make living in' the vicinity uncomfortable, unpleasant, and unsafe; that the mental condition of the residents would be affected by constant fear, annoyance, and inconvenience. There, as here, there would be no actual danger if the institution was properly conducted. It was there held that, while a hospital is not a nuisance per se, it might be so located and conducted as to be a nuisance to people living close to it, and that, when a psychopathic hospital was located and conducted in a strictly residential district, it became such as to the owners of residential property in close proximity. We might well say in this case, as was there said by the Chief Justice, speaking for the majority of the court:

“It must be conceded that the establishment of such an institution in close proximity to the residences of the plaintiffs, which are in a residential section of the city, would destroy the comfort, the well-being, and the property rights of the plaintiffs.”

We do not overlook the contention of the defendants that the writ of injunction is not one of right, but of grace. It should not issue out of hand, but should issue in cases where the right to such relief is clearly-established. Such we find this case to be. We have here a case of the maintenance of a business which, while not a nuisance per se, is such as to these plaintiffs by reason of its location in a strictly residential district; a business which will cause depression to the normal person, lowering his vitality, rendering him more susceptible to disease, and depriving his home of the comfort, repose, and enjoyment to which he is entitled. Coupled with this is the substantial financial loss, due to the depreciation in the value of his property, and the strong probability that added to the other discomforts he will be called upon to suffer will be noxious odors during the summer months. Such a case appeals to the conscience and discretion of the court, and calls for injunctive relief.

The decree of the court below will be reversed, and one here entered in conformity with the prayer of the bill. Plaintiffs will recover the costs of both courts.

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

Ostrander, J.

In view of the decision of this court in Barth v. Hospital Ass’n, supra, I concur in the result.


author: Fellows, J.

text:
    CROSSMAN v. AMERICAN INSURANCE COMPANY OF NEWARK, N. J.
    *1. Insurance — Fire Insurance — Title to Realty.
    Where one verbally applies for fire insurance and he is not asked as to the state of the title, and he does not act fraudulently, he is not required to disclose the exact condition of the title.
    2. Same — Fire Insurance — Breach of Contract — Forfeiture.
    If an applicant for fire insurance discloses the exact condition of his interest in the property insured in a verbal application to the insurer’s agents, the insurer cannot claim a breach of condition so as to work a forfeiture of the contract and render it void from the beginning on the ground that insured was- not the sole and unconditional owner of the property.
    3. Same — Insurable Interest — Gambling Contracts.
    Policies of insurance founded upon mere hope and expectation and without some interest in the property, or the life insured, are objectionable and void as a species of gambling, and are called wagering policies.

    4. Same — Fire Insurance — Insurabee Interest, What Constitutes.
    The principal consideration in determining the existence of an insurable interest in property insured against loss by fire is not what is tbe title of the insured, or whether he has a lien thereon or possession, but whether he will suffer pecuniarily by its loss.
    5. Same — Fire Insurance — Options.
    The possessor of an option for the purchase of property, for which he has paid a considerable sum, has an insurable interest in the property.
    Error to Wayne; Cross, J., presiding.
    Submitted June 22, 1917.
    (Docket No. 23.)
    Decided September 27, 1917.
    Assumpsit by John M. Crossman against the American Insurance Company of Newark, New Jersey, on a policy of insurance. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Lucking, Helfman, Lucking & Hanlon, for appellant.

      James H. Pound (Charles H. Hatch, of counsel), for appellee.
    On April 3, 1912, Maria McDonald was the owner of a land contract for the purchase of certain premises in Highland Park, located on Hamilton boulevard, consisting of two stores, with apartments then occupied by her, on the second floor. She was in arrears on her contract, and on this day surrendered it to plaintiff, taking back an option to purchase it at any time within one year upon payment of $5,261, with interest at 6 per cent. By the terms of this, option she was to pay $10 per month for the dwelling part of the property, and after May 6th plaintiff was to collect the other rents, for which he was to account on her paying the amount above mentioned. Daniel McDonald, a son of Maria McDonald, was indebted to Donaldson Craig, and on November 20th they came to an accounting, and there was found due Mr. Craig $2,531.28. To pay this sum Mrs. McDonald then assigned and transferred her option on the Hamilton boulevard property to him. He informed plaintiff of this assignment, and learned in the conversation the amount of insurance carried on the building. On January 24, 1913, the policy of insurance here involved was issued through Eliot & Haviland, defendant’s local agents. The application for the insurance was verbal, and no inquiry was made as to the condition of the title. Mr. Craig, however, voluntarily and fully told the agents, the state of the title as. he had learned it, and the policy was issued to him as thp assured “on property sold to assured on contract; loss, if any, payable first to John M. Crossman and then to assured as. their interest may appear.” Mr. Craig did not read the policy, which was the Michigan standard form. After the assignment from* Mrs. McDonald to Craig, and after plaintiff knew of it, he gave cMrs. McDonald notice to quit, but nothing further seems to have been done, and she remained in the apartments until the fire. The record ■ discloses that although plaintiff was the owner of the record title of the premises, he had given to one Campbell the right to redeem, on payment of the amount due from Campbell to plaintiff. On January 29, 1913, the fire occurred, and proof of loss was seasonably filed. On April 3, 1913, Craig tendered to plaintiff $5,700, and requested a deed. The parties disagreed as to the amount due, and a bill was filed for specific performance. Pending that suit, by agreement between them,. Craig assigned any interest he might have under the policy of insurance to plaintiff, and this action was brought, resulting in a recovery in the circuit court. Defendant brings the case here.

       Authorities passing on the question as to insurable interest of tenant in leased property, see note in 42 L. R. A. (N. S.) 135.

   Fellows, J.

(after stating the facts)„ It is insisted on behalf of defendant that the policy is not enforceable, because: (1) at the time the policy was issued Craig was not the unconditional and sole owner of the property; (2) that he did not have an insurable interest.

The testimony is undisputed that the application for this insurance was verbal, and that Mr. Craig was not inquired of as to the state of his title. There is no claim of any fraud practiced by him, or any deceit on his part. Under the holdings of this court, he was not required, under these circumstances, to show the exact condition of his title. Brunswick-Balke-Collender Co. v. Assurance Co., 142 Mich. 29 (105 N. W. 76); Guest v. Insurance Co., 66 Mich. 98 (33 N. W. 31); Hoose v. Insurance Co., 84 Mich. 309 (47 N. W. 587, 11 L. R. A. 340); Hall v. Insurance Co., 93 Mich. 184 (53 N. W. 727, 18 L. R. A, 135, 32 Am. St. Rep. 497). Mr. Craig, however, advised the agents of the company what his interest was, and they therefore knew before the policy was issued that he was not the unconditional and sole owner of the property. Defendant cannot now claim a breach of condition then existent, and then known to it, to work a forfeiture of the contract of insurance, and rendering it void from the beginning. We have so recently considered the question of whether an insurance company may defend on the ground of a breach of condition, which existed at the time the policy was issued, to the knowledge of the agent, and therefore to the knowledge of the company, that we content ourselves with calling attention to that case, and the authorities there cited. Gordon v. Insurance Co., 197 Mich. 226 (163 N. W. 956).

It was pressed upon the court at the argument with vigor that Craig did not have an insurable interest in the property, and for this reason plaintiff must fail in his right of recovery, and the question is fully discussed in the briefs filed. This presents the meritorious question in the case. Policies of insurance founded upon mere hope and expectation and without some interest in the property,-or the life insured, are objectionable as a species of gambling, and so have been called wagering policies. All species of gambling policies were expressly prohibited in England by Stat. 19 Geo. II, chap. 37, and have been treated as illegal in this country upon the principles of that statute, without acknowledging it as authority. Here, such contracts of insurance are treated as contravening public policy, and are therefore void. If this policy falls within this class, it is void, and prevents plaintiff’s recovery. If it does not, this judgment must be affirmed.

The argument of the defendant is that the assured must have title to the property, either legal or equitable or a lien thereon, in order to have an insurable interest in the property such as is contemplated by the- law; that in the instant case Craig’s interest was but that of an optionee, and therefore not insurable. In this defendant is in error. An insurable interest does not, of necessity, depend upon ownership of the property. It may be a special interest entirely disconnected from any title, lien, or possession. If the holder of an interest in property will suffer direct pecuniary loss, by its destruction, he may indemnify himself therefrom by a contract of insurance. The question is not what is his title to the property, but rather, would he be damaged pecuniarily by its loss. If he would, he has an insurable interest. That interest may. be derived by possession, enjoyment, or profits of the property, security or lien resting upon it, or it may be other certain benefits growing out of or dependent upon it. It was said by Mr. Justice Gray, speaking for the court in Harrison v. Fortlage, 161 U. S. 57 (16 Sup. Ct. 488) :

“It is well settled that any person has an insurable interest in property, by the existence of which he will gain an advantage, or by the destruction of which he will suffer a loss, whether he has or has not any title in, or lien upon, or possession of the property itself.”

This case involved a consignment of sugar where, by the terms of the contract, the property did not pass to the buyer until it left the ship’s tackle. The case of Getchell v. Insurance Co., 109 Me. 274 (83 Atl. 801, 42 L. R. A. [N. S.] 135, Am. & Eng. Ann. Cas. 1913E, 738), involved the question of whether a tenant had an insurable interest in the property. It is an interesting case, and quite fully considers the authorities on the subject. Speaking for the court it was said by Mr. Justice Cornish:

“The crucial question therefore is, Will the insured be directly and financially affected by the loss of the property insured? If so, he has such an interest as the law will recognize. The loss must not be indirect or sentimental, but direct and actual. It is not necessarily an interest in the property in the sense of title, but a concern in the preservation of the property and such a relation to or connection with it as will necessarily entail a pecuniary loss in case of its injury or destruction. This opens a wide field, and the decisions take an extensive range with a growing tendency to expand rather than to contract the scope of the term.”

In the case of Rohrbach v. Insurance Co., 62 N. Y. 47 (20 Am. Rep. 451), a much-cited case, after considering the writers on this subject, it was said:

“But the result of a comparison of the textwriters above cited is that there need not be a legal or equitable title to the property insured. If there be a right in or against the property, which some court will enforce upon the property, a right so closely connected with it, and so much dependent for value upon the continued existence of it alone, as that a loss of the property will cause pecuniary damage to the holder of the right against it, he has an insurable interest.”

Mr. Justice Andrews, speaking for the same court in Riggs v. Insurance Co., 125 N. Y. 7 (25 N. E. 1058, 10 L. R. A. 684, 21 Am. St. Rep. 716), said:

“It would seem, therefore, that whenever there is a real interest to protect and a person is so situated with respect to the subject of insurance that its destruction would or might reasonably be expected to impair the valué of that interest, an insurance on such interest would not be a wager within the statute, whether the interest was an ownership in, or a right to the possession of, the property, or simply an advantage of a pecuniary character haying a legal basis, but dependent upon the continued existence of the subject.”

It was said by the supreme court of Massachusetts, in the case of Williams v. Insurance Co., 107 Mass. 377 (9 Am. Rep. 41):

“And it is now well established that even one who has no title, legal or equitable, in the property, and no present possession or right of possession thereof, yet has an insurable interest therein, if he will derive benefit from its continuing to exist, or will suffer loss by its destruction.”

The rule is tersely stated in 14 R. C. L. p. 910:

“It may be said, generally, that any one has an insurable interest in property who derives a benefit from its existence or would suffer loss from its destruction.”

Without further quotation we content ourselves with citing the following: Berry v. Insurance Co., 132 N. Y. 49 (30 N. E. 254, 28 Am. St. Rep. 548); Merrett v. Insurance Co., 42 Iowa, 11; Schaeffer v. Insurance Co., 113 Iowa, 652 (85 N. W. 985) (a tenant at will); Home Ins. Co. v. Mendenhall, 164 Ill. 458 (45 N. E. 1078, 36 L. R. A. 374) (an extreme case); German Ins. Co. v. Hyman, 34 Neb. 704 (52 N. W. 401); Graham v. Insurance Co., 48 S. C. 195 (26 S. E. 323, 59 Am. St. Rep. 707); Strong v. Insurance Co., 10 Pick. (Mass.) 40 (20 Am. Dec. 507, and note at page 510); Commercial Fire Ins. Co. v. Capital City Ins. Co., 81 Ala. 320 (8 South. 222, 60 Am. Rep. 162) ; Cumberland Bone Co. v. Insurance Co., 64 Me. 466; Wainer v. Insurance Co., 153 Mass. 335 (26 N. E. 877, 11 L. R. A. 598); Hayes v. Insurance Co., 170 Mass 492 (49 N. E. 754) ; People’s St. R. Co. v. Spencer, 156 Pa. 85 (27 Atl. 113, 36 Am. St. Rep. 22); Warren v. Insurance Co., 31 Iowa, 464 (7 Am. Rep. 160); 1 May on Insurance (4th Ed.), § 80.

The unrippled current of authority is to the effect that title to, or lien upon, property, is not essential to an insurable interest. Measured by the standard fixed in the cases quoted from, and cited, Did Craig have an insurable interest in this property? He had an option upon this property, a right to buy it, an enforceable right, for which he paid over $2,500. Was that right of more value with the building standing than with the building destroyed? Would he suffer direct pecuniary loss in the value of his right by its destruction? Would he be damaged pecuniarily by the loss of the building? To ask these questions is to answer them. Obviously this contract of insurance was not a wagering, gambling, contract prohibited by public policy, but was valid and enforceable.

The judgment is affirmed.

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


text:
    BOSTON PIANO & MUSIC CO. v. SECKINGER.
    1. Contracts — Gambling Contracts — Fraud—Public Policy.
    A scheme for the sale of groceries as an incident to the giving of certificates in a so-called advertising campaign, which certificates, at the end of the period, are to be counted to determine which one of 100 candidates should have a piano and other various articles, and which scheme is part of a contract of sale of the prizes, is illegal.
    2. Same.
    A contract for the purchase of a piano and other articles to be used to put in operation a so-called advertising campaign by a merchant, including an illegal scheme for the furtherance of such campaign which is the inducement to the contract, is void and unenforceable.
    Error to Washtenaw; Kinne, J.
    Submitted June 21, 1917.
    (Docket No. 102.)
    Decided September 27, 1917.
    Assumpsit by the Boston Piano & Music Company against Joseph E. Seckinger for goods sold and delivered. Judgment for defendant. Plaintiff brings error.
    Affirmed.

      F. M. Freeman (Frank A. Stivers and Roscoe O. Bonisteel, of counsel), for appellant.

      A. J. Waters (A. J. Sawyer, of counsel), for appellee.
   Fellows, J.

The defendant is engaged in the retail grocery business at the village of Manchester, Washtenaw county. On July 14, 1915, the agent of plaintiff called upon him, and the result of such call was a written order, or agreement, signed by defendant for the purchase of a piano, 12 minor articles, and the paraphernalia, literature, circulars, instructions, etc., necessary to put into operation and conduct a so-called advertising campaign, with the ultimate object of giving the piano and other articles away. The agreed purchase price was $465. It appears from the record that the piano and other 12 articles were worth $200, and we infer that the balance was for the scheme devised by plaintiff and the necessary paraphernalia for its operation. The goods were shipped and a book of instructions, literature, certificates and other necessary paraphernalia were sent. They were refused and later this action was brought, plaintiff counting in a special count on the contract, and also upon the common counts. The case was submitted to the jury, which rendered a verdict for the defendant, and plaintiff brings the case here.

We do not agree with plaintiff’s counsel that this case belongs to that class of cases where a lawful article of commerce is afterwards used by the purchaser in an unlawful manner, or in violation of some statute, without the privity of the vendor, and where recovery is had, notwithstanding the unlawful use to which it is put by the purchaser. Here the scheme was a part of the consideration, and an inducement to the contract, and, so far as this particular question is concerned, this case is ruled by La France v. Cullen, 196 Mich. 726 (163 N. W. 101). It therefore becomes necessary to examine the scheme which the defendant contracted to purchase, together with the methods of its execution. The scheme contemplated that for quite an extended period, nearly a year, defendant should give to his customers certificates to be furnished him by the plaintiff. It contemplated the nomination of 100 candidates, each of whom would seek to get the largest amount of these certificates before the contest closed, with a view of obtaining a free piano. It contemplated the posting of the standing of the candidates weekly on a poster in defendant’s store, the keeping of all the candidates cheered up, and in the race until the last day. Briefly stated, it contemplated the abandonment of the old-fashioned method of selling groceries on their merits, and the substitution of a plan of selling groceries as an incident to giving the certificates, which, at the end of the period, would be counted to determine which one of the 100 candidates should have the piano, which the sparkling diamond weighing one-sixteenth of a carat, which the other minor prizes, and which 87 out of the 100 should get nothing. The contract, as a part of the consideration, required the delivery to defendant of:

“One book giving suggestions for starting the campaign, containing much valuable information and suggestions for starting the campaign, securing organizers and getting them enthusiastically at work, which the retailer may use as he prefers. Copyrighted.”

This book was sent on and it appears in the record. To the unsophisticated and the uninitiated in the method of conducting these gift enterprises, it is an interesting production. While it is urged by plaintiff that it is only suggestive of the measures used in conducting these contests, and therefore need not be followed, still it furnished part of the consideration, contained the suggestion of the plaintiff, and was a part of the scheme, and its first admonition is as follows:

“Dear Mr. Merchant: This booklet is prepared for your special benefit. It is a personal message to you and contains some facts gained after long experience and as the result of hundreds of similar contests. Piano contests are our specialty, as understanding the quality of leather, flour, cloth, or any other line may be your specialty. We have spent a great deal of time and money in securing information of merchants pertaining to their methods of conducting their contest which resulted so successfully. Your contest can be the means of wonderfully increasing yoúr business and bringing you a very liberal profit, or it can be conducted in such a way that you will realize no returns from it. The important point is to get it started right; therefore, we say, study these instructions and have clerks study them. Every hour spent in studying our suggestions and carrying them out will mean a big profit to you.” * * *

It is suggested that candidates be selected from the different nationalities, and from different locations, suggesting that “a popular school teacher makes a powerful contestant”; that lodges and churches be selected. In this connection the following suggestion is made:

“The same rule which applies to the country districts applies also to the city- There are the church circles, lodge circles, societies, the literary element, saloon element, and many more cliques or groups of people held together by some mutual interest. If the Methodist Sunday school can be enlisted in the work for the piano the entire Methodist church will help, and should no other church in the town enter, many of the people from other churches will pitch in and help.”

Under the head “Be honest with them all” occurs the following:

“Should you find that a very strong lodge or church is interested be sure and nominate some other strong lodge or church to work with it. Don’t let any one win too easily.”

While under the head “How to honorably sustain and accelerate interest in the campaign,” in some additional suggestions found in another exhibit, the following suggestion is made:

“When certain contestants seem to be running too far ahead it may be well to suggest to them that they had better not vote their certificates too fast, but hold some back, as it will cause others to work all the harder against them if they advance too rapidly. This is for the benefit of one or two who may be forging away ahead, but as a matter of fact, the others will keep in the race longer and work harder if one or two do not get too far ahead. Should one get too far ahead, it is liable to discourage others, and the suggestion here given is to help avoid that condition. Quite often, however, the one who spurts ahead at the start is liable to lose interest later and drop out, and you must impress all with the idea that no one is sure of winning until the end and all have an equal chance.” * * *

Printed circular letters were furnished to be sent the candidates informing them of their nomination, but not informing them that they have been nominated by the party conducting the contest. This letter states:

“Dear Friend: We are pleased to announce that you have been nominated a contestant in our piano advertising campaign, making it possible for you to become the happy possessor of the beautiful upright grand parlor piano now on exhibition in our store absolutely free of cost. This is a strictly high grade, standard instrument manufactured by a reputable factory, is warranted by the makers for a period of ten years, and bears their name on the name plate. It is an instrument of which any home may well be proud. We give free piano certificates to the amount of each purchase at our store, and the person holding the greatest amount of these certificates at the close of the campaign receives the piano entirely free of cost.” * * *

Notwithstanding the statement in this letter that-certificates are given to the amount of each purchase, after the candidates have been secured and the contest started, it was suggested:

“After the campaign is 'well started, give due bill cards to those who are behind to sell, showing them how they can get the extra certificates and greatly increase their standing in this way, while you get cash in advance for future trade. When you think it advisable tell them that if they will sell five $5 cards within a given time, say a week, you will give them double certificates on them. They now see an opportunity to get ahead and get busy and sell a large number of due bill cards, bringing cash to the store and advancing their chances of winning.” v

And it was further suggested:

“At the right time offer a bonus of from $10,000 to $25,000 as your judgment may dictate, to each contestant who doubles their standing during a given time, say a week or a month, as circumstances may direct. This is an opportunity for the low ones to make a gain, as they can double so much easier than the high ones. This plan has been used very successfully for equalizing the standings of contestants, and it is perfectly fair for all have the same opportunity. Do you get the idea?”

Notwithstanding the representations to the candidates as to the conditions under which the certificates would be issued, made in the letter before referred to, sent for the purpose of inducing them to enter the contest, the scheme contemplated, and the paraphernalia for its execution was furnished, that at some time during the contest it should be arranged that certificates, in addition to those given at the time of purchase, should be given to those agreeing to trade at defendant’s store. These were called pledge of patronage cards. So if A. signed a pledge of patronage card, saying that he would trade $5 at defendant’s store within the next 30 days, he would be given $5 in certificates. If he went in the next day and bought the $5 worth of goods he would be given $5 worth of certificates additional, making $10 worth of certificates for his candidate on his $5 purchase. The candidates were not to be instructed, so far as this record discloses, in the intricacy of this part of the scheme, but were to be urged to get signed pledge of patronage cards, as well as to “hump, hump, steadily and continuously.” Another scheme, within the scheme, and which changed the plan under which the candidates entered, contemplated that some time after the contest was under' way three times the amount of the purchase should be given in certificates through the disposal of undesirable and unsalable stock. This is the eleventh suggestion of the plaintiff found in Exhibit C. We quote from it:

“Make use of the yellow or green tag sale. Pick out such odds and ends of your stock as you wish to get rid of and place same in some convenient place. Tag those you wish to get rid of first with a yellow tag. On this tag will be found the .following printed form: Yellow Tag Sale. Triple certificates will be given on goods marked with yellow tag. Price-. Mark on each tag the price and attach it to the articles you wish to dispose of. The green tag printed in the same way, excepting it provides for double certificates, is used in the same way. The contestants buy goods so marked to get the additional certificates and urge their friends to do likewise. Some dealers put on a green tag sale first and later a yellow tag sale, while others use both kinds of tags for the same sale, marking the articles they wish to dispose of first with a yellow tag. Some dealers dispose of large quantities of dead, undesirable or unsalable stock in this way. The dealer must use his best judgment in all such matters, as well as matters in connection with his contest. It is usually best to conduct a yellow tag sale first and later put on a green tag.sale. The contestants who are hungry for certificates will gobble up lots of the goods with these tags to get the extra amount of certificates. It often occurs that large quantities of undesirable stock is disposed of in this way.” * * *

It will be unnecessary to quote further from the literature of the plaintiff, or to further detail the scheme which defendant was expected to pay $265 for. Sufficient has been said to show the general character of the transaction and how the so-called advertising campaign was to be conducted.

Plaintiff’s counsel is correct in his contention that the scheme is not a lottery, as that word has been defined by this court in People v. Elliott, 74 Mich. 264 (41 N. W. 916, 8 L. R. A. 403, 16 Am. St. Rep. 640). In the distribution of the prizes one essential element of a lottery, that of chance, is lacking. But while it may not be a lottery it has all the vices, all the appeals to cupidity, all the seductiveness of a lottery, and more. Without recapitulating all of its vicious elements it will suffice to say that it contemplated obtaining the energy and the services of 100 candidates upon the representations that the piano would go to the one holding the largest amount in certificates at a given time; each dollar of certificates to represent a dollar of purchase at defendant’s store; that notwithstanding this understanding with each candidate, defendant was to secretly give to certain of the candidates, those temporarily low, certificates which did not represent' purchases at defendant’s store, but which were a gratuity pure and simple; further, that by a manipulation of the pledge of patronage cards twice the amount of the purchases were issued in certificates to those knowing how to manipulate this part of the scheme, and further, that by the purchase of undesirable goods, three times the amount of the purchases in certificates were issued; further, that bonuses were to be given, all this to be done after the candidates had been induced to enter on the representation that a dollar certificate represented a dollar purchase, no less and no more. It contemplated that the public and candidates generally should understand that the true and correct standing of all candidates should be posted weekly; but that by a secret arrangement with the high candidates this notice posted in defendant’s store should not speak the truth. It contemplated the arraying of class against class, church against church, lodge against lodge, locality against locality, nationality against nationality, the literary element against the saloon element, clique against clique, in the mad scramble covering nearly a year, by 100 candidates for a cheap piano. We are asked to declare that this scheme is conducive to good morals. We decline to do so. It is infected with deception, freighted with artifice, and permeated with trickery. It is not a lottery, and has not even the respectability of the trading stamp scheme, which has been condemned as against good morals and the public welfare by the legislatures of many of the States of the Union, and which legislation has been sustained by the court of last resort of the Nation in the case to which we shall presently refer, although in the trading stamp scheme each holder of stamps of a stated value received some article of some value.

Nor can the scheme here involved be correctly called an advertising campaign. It is not advertising. It was said by Mr. Justice McKenna, speaking for the court in Rast v. Van Deman & Lewis Co., 240 U. S. 342, 365 (36 Sup. Ct. 370, 377, L. R. A. 1917A, 421, Am. & Eng. Ann. Cas. 1917B, 455):

“It would be an endless task to cite cases in demonstration, and that the supplementing of the sale of one article by a token given and to be redeemed in some other article has accompaniments and effects beyond mere advertising the allegations of the bill and the argument of counsel establish. Advertising is merely identification and description, apprising of quality and place. It has no other object than to draw attention to the article to be sold, and the acquisition of the article to be sold constitutes the only inducement to its purchase. The matter is simple, single in purpose and motive; its consequences are well defined, there being nothing ulterior; it is the practice of old and familiar transactions and has sufficed for their success. The schemes of complainants have no such directness and effect. They rely upon something else than the article sold. They tempt by a promise of a value greater than that article and apparently not represented in its price, and it hence may be thought that thus by an appeal to cupidity lure to improvidence. This may not be called in an exact sense a ‘lottery,’ may not. be called ‘gaming’; it may, however, be considered as having the seduction and evil of such, and whether it has may be a matter of inquiry, a matter of inquiry and of judgment that it is finally within the power of the legislature to make.”

The scheme, which was a part and the essential part of the contract between these parties, was bad in morals and against public policy. The contract for its purchase was void and unenforceable. The court should have directed a verdict for the defendant for this reason.

The judgment is affirmed.

Kuhn, C. J., and Stone and Steere, JJ., concurred with Fellows, J. Ostrander, Bird, Moore, and Brooke, JJ., concurred in the result.