text:
    GREEN BAY CUT STONE CO. v. FABRY.
    1. Mechanics’ Liens — Evidence—Pleading—Bill of Complaint as Evidence.
    Notwithstanding the provisions of Chancery Rule 10, subd. a, providing that neither a sworn bill nor a sworn answer shall have the force of evidence except as to admissions and except on motions, etc., a sworn bill offered in evidence in proceedings to enforce a mechanic’s lien, not denied by answer under oath, established aprima facie case. 3 Comp. Laws, § 10719.
    2. Same — Waiver—Effect of Clause Waving Sworn Answer —Equity.
    "The right to rely on the averments of the bill, verified as required by statute, was not lost by ncluding therein a clause waiving sworn answer.
    3. Same — Notice of Subcontractor — Claim.
    Where the owner of property on which complainant had provided building materials paid out to the other claimants funds remaining in its hands, knowing that complainant remained sole lien claimant after receiving from one of the principal contractors a statement on oath showing that complainant had a claim for an unstated sum, besides other materialmen named, complainant’s, lien was not defeated by its failure to serve the preliminary notice required by 3 Comp. Laws, § 10710, which was enacted to protect the subcontractor or laborer, and is not a condition precedent to the lien.
    Appeal from Menominee; Flannigan, J.
    Submitted January 26, 1912.
    (Docket No. 83.)
    Decided March 29, 1912.
    Bill by the Green Bay Cut Stone Company against Louis Fabry and others for the enforcement of a mechanic’s lien. From a decree for defendant, complainant appeals.
    Reversed.

      Michael J. Doyle (John E. Tracy, of counsel), for complainant.

      John J. O’Hara, for defendant Fabry and others.

      ff. J. Trudell, for defendant First National Bank.
   Blair, J.

This is an action for foreclosure of a mechanic’s lien. The evidence is undisputed and shows the following facts:

The defendants Louis Fabry and Pinchard brothers were the general contractors for the erection of a building for the First National Bank of Menominee, and the complainant was a subcontractor under them. Some time in May, 1909, the last work was done upon said building, and on July 3, 1909, complainant filed in the office of the register of deeds a statement of lien in the form provided by statute (section 10714, 3 Comp. Laws), and on the same day served a copy thereof upon the cashier of the bank, who represented the bank in the matter. At that time, there was due to complainant on its contract the sum of $1,030.55 and for extras, $121. The claim for extras was subsequently abandoned. At the time of the serving and filing of the lien statement, the bank was indebted to the principal contractor in the sum of $3,104.43. On July 16, 1909, a meeting was held, at which there were present the cashier of the bank, the principal contractor, and Mr. Navarre, the general manager of the complainant corporation. At that time, the statutory period for the filing of subcontractors’ liens had expired, and the only subcontractor claiming a lien was the complainant. All other subcontractors had executed waivers. On that day, the cashier of the bank paid out to various subcontractors, on orders of the principal contractor, all of the said sum of $3,104.43, with the exception of $400. The cashier paid the complainant on that day the sum of $830.55, leaving a balance of $200 still- due complainant. The bank held up the sum of $400, because that amount was claimed from the contractor by the architect on some deal between them. Later, without the consent of the complainant, the bank paid to the architect this $400. The complainant, prior to filing its lien statement, had not served any preliminary notice under section 10710, 3 Comp. Laws.

On May 16, 1909, the defendant Fabry furnished to the bank a statement purporting to be a statement of debts owing to subcontractors and materialmen, under section 10713, 3 Comp. Laws, and on May 25, 1909, the defendants Pinchard brothers furnished a similar statement. Both these purported to have been sworn to before a notary public in Green Bay, Wis.; but there was no certificate attached or other evidence in the case to show the official character of such notary public, except the imprint of an- official seal. Of these statements, the one furnished by Fabry contained the name of complainant as a subcontractor, with the amount of its indebtedness left blank, and the name S. Navarre, with a statement of indebtedness of $700. The statement of Pinchard brothers did not contain the name of either complainant or Navarre. It was proved that S. Navarre had no connection with such contract or with the work on such building, except as general manager of complainant company.

Complainant, to prove its case, offered in evidence, under the statute (section 10719, 3 Comp. Laws), its verified bill of complaint filed in the cause, which bill of complaint was received in evidence, without objection, as constituting complainant’s proofs. Such bill of complaint was in the usual form and set forth all the necessary facts to establish a mechanic’s lien upon the property described. After the case had been submitted to the court upon briefs of counsel, the learned circuit judge filed an opinion, dismissing the bill as to the defendant First National Bank, on the ground that complainant had failed to prove that its lien statement was filed within 60 days after the performance of the work. Upon the attention of the circuit judge being called to the allegations of the verified bill of complaint which had been offered in evidence, he reconsidered the case, and then filed a supplemental opinion, holding that the bill could not be considered as evidence, because there was contained therein a waiver of answer under oath. Complainant appeals to this court.

As stated in complainant’s brief, the questions before the court are:

First. Did complainant establish a prima facie case by the introduction in evidence of its verified bill of complaint ?
Second. Is the complainant barred from a lien by its failure to serve a preliminary subcontractor’s notice under section 10710, 3 Comp. Laws ?

We have not been favored with a brief in behalf of defendants.

First. Section 10719, 3 Comp. Laws, provides that—
“Proceedings to enforce such lien shall be by bill in chancery, under oath * * * and all bills sworn to shall be evidence of the matters therein charged unless denied by answer under oath.”

The general practice relative to the effect of sworn answers was materially altered by Chancery Rule 10, subd. a, which provides that—

“ Whenever in a cause a sworn bill of complaint is Sled and a sworn answer demanded, the defendant shall be required to file such sworn answer. But neither a sworn bill nor a sworn answer shall have the force of evidence except as to admissions, and except on the hearing of motions and petitions. Provided, however, that when a cause is heard on bill and answer, the allegations of the answer shall be taken as true.”

If, therefore, complainant had demanded a sworn answer, neither his bill nor the sworn answer would have had any effect as evidence under the general practice. It is only by virtue of the express provisions of the statute that the bill has such effect, and decisions under the general practice, prior to rule 10, as to the effect of waiving an answer are irrelevant. The statute alone provides how the effect of the sworn bill as evidence may be obviated.

Second. It appears from the testimony of the cashier of the bank that at the settlement on July 16th, after complainant’s lien had been filed and a copy served on him, there was $3,104.43 still due on the contract:

That waiver of lien was signed by Navarre for the Green Bay Cut Stone Company. It excepts from its operations the sum of $200, which is the amount claimed here. The other waivers of lien were given to me the same date, at the same time these moneys were paid. On the 11th day of July, the Green Bay Cut Stone Company had informed me that it then claimed a balance of $1,038.55 for its work and labor on the bank building. These other creditors had also been notified of their claims. The other creditors executed the waiver of their claims. But the Green Bay Out Stone Company, in the waiver of claim that they gave me, excepted therefrom this $200. Other liens beside this one have been filed on the bank. All these have been paid in full. * * * Mr. Navarre received $830.55. Mr. Fabry claimed at that time that the bank owed him, in addition to the amount paid by honoring these drafts, the sum of $400. At the same time, Mr. Navarre claimed there was still coming to him $200 from Fabry or the defendants. The way that came about is this: The amount that was held back was for a bill that Fabry disputed, and he turned around to Navarre and said, ‘You stand $200 of that, and I will stand the other $200 and some odd dollars.’ There was no adjudication or settlement of that claim, but $400 was allowed to remain with the bank; it being understood that of that $400 Mr. Navarre claimed that he was entitled to $200.”

This provision relative to a preliminary notice “is for the protection of the subcontractor, or laborer, and is not a condition to the lien attaching.” Smalley v. Brown-Stone Co., 114 Mich. 104 (72 N. W. 29).

The bank paid out the $400 with full knowledge of complainant’s claim; the principal contractor admitted its correctness; and complainant was the sole lien claimant. Under such circumstances, the failure to file the preliminary claim afforded no protection to defendant bank.

The decree is reversed, and a decree may be entered in favor of complainant in pursuance of this opinion.

Moore, O. J., and Steers, McAlvay,- Brooke, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


source: Caselaw Access Project

author: Blair, J.

license: Public Domain

text:
    HEDRICK v. FIRKE.
    1. Vendor and Purchaser — Specific Performance — Tender.
    By attempting to rescind a land contract and serving written notice that vendee would not perform, he waived the right to insist on the tender of an abstract of title at the time the deed was to be delivered; an offer on the part of complainant to furnish a sufficient abstract in his bill for specific performance was sufficient.
    2. Specific Performance — Penalty as Defense — Damages.
    Where a stipulation for the payment of a certain sum in case of default under a land contract is in reality a penalty, it furnishes no obstaole to a specific performance of the contract; but where it is in reality for liquidated damages it will be held to be in lieu of specific performance if it appears from the entire agreement that the right to pay such sum or perform the contract should be optional.

    3. Same-Liquidated Damages.
    A clause in a contract for the sale of real property for the sum of §18,960, stipulating that in case the vendee should make default the vendors might retain the sum of §500, paid at the time of executing the contract, as forfeit money and to pay them for their trouble and damages by reason of the breach, was a provision for stipulated damages, not a penalty.
    4. Same.
    Under a contract, giving the vendors the option whether to retain the payments made as liquidated damages, or insist upon performance, the vendor might have speoifio enforcement.
    Appeal from Gratiot; Searl, J.
    Submitted January 19, 1912.
    (Docket No. 125.)
    Decided March 29, 1912.
    Bill by J. Willis Hedrick and Bertha Hedrick against Charles W. Firke for specific performance of a contract for the sale and purchase of real property. From a decree overruling a demurrer to complainants’ bill, defendant appeals.
    Affirmed.

      William A. .Bahlke, for complainants.

      Charles W. Firke (James Q. Kress and O. Q. Tuttle, of counsel), for defendant.

       Right to specific performance as affected by provision for liquidated damages, see note in 2 L. R. A. (N. S.) 210.

   Blair, J.

On October 15, 1910, the parties hereto entered into a land contract, containing, among others, the following provisions:

“ That said parties of the first part, in consideration of the sum of eighteen thousand nine hundred sixty ($18,960) dollars to them duly paid, hereby agree to sell unto the said party of the second part, all that certain piece or parcel of land lying and being situate in the township of Arcada, county of Gratiot and State of Michigan, and more particularly known and described as * * * for the sum of eighteen thousand nine hundred and sixty dollars ($18,960.00), which said party of the second part hereby agrees to pay to said parties of the first part as follows: Upon the execution and delivery of this contract, five hundred dollars ($500.00); March 1st, 1911, eight thousand five hundred and sixty dollars ($8,560.00); at which time said second party will assume and agree to pay nine thousand nine hundred dollars ($9,900.00) when due the then balance remaining unpaid upon a certain real estate mortgage now upon said described premises, and at which time first parties will execute and deliver to second party a good and sufficient warranty deed as hereinafter provided: It is agreed by second party hereto, that should he make default in the conditions of the payments herein specified, and neglect or refuse to complete the terms of this contract as herein provided to be done on March 1st, 1911, the $500.00, paid upon the execution of this contract shall be retained by the first parties as forfeit money and to pay them for their trouble and damages by reason thereof. The said party of the first part hereby covenants and agrees on or before the first day of March, 1911, to furnish to the said party of the second part a complete abstract of title to said premises brought down to a then recent date certified to by a competent abstractor, showing a good merchantable title to the said premises free and clear of any and all encumbrance and allow second party reasonable opportunity to have said abstract examined. * * * It is mutually agreed between said parties that the said party of the second part shall have possession of said premises on March 1st, 1911, and shall keep the same in as good condition as they are at the date hereof, until the said sum shall be paid as aforesaid; and if said party of the second part shall fail to perform this contract, or any part of same, said parties of the first part shall, immediately after such failure, have a right to declare the same void and retain whatever may have been paid on such contract, and all improvements that may have been made on said premises, as liquidated damages and may consider and treat the party of the second part as his tenant holding over without permission, and may take immediate possession of the premises, and remove the party of the second part therefrom.”

Defendant paid the $500 as agreed, but upon February 25, 1911, notified complainants that he would not perform the contract and elected to rescind the same.

On the 9th day of March, 1911, complainants filed their bill of complaint against defendant, setting forth the contract, alleging: That, in reliance thereon, they had sold the personal property on the farm to the amount of $2,700, had purchased on contract a farm in Saginaw county for $16,000, upon which they expected to move March 1,1911, had purchased of their vendor personal property to the amount of $1,500; that defendant is financially irresponsible, is a resident of Mansfield, 111., and—

“ Has no property other than said lands within the . State of Michigan from which the amount due the said complainants could be made in case judgment were obtained against him for the breach of his said contract.”

That complainants are without adequate remedy to protect themselves, unless defendant be required to specifically perform the contract.

“Complainants further aver that they hereby elect to enforce the terms and conditions of the said contract as against the said defendant; that the stipulated damages set forth in said contract are wholly inadequate to compensate them for the damages which they have sustained in the premises, and that they refuse to accept the said sum in satisfaction thereof, but, on the contrary, hereby elect to enforce the said contract against the said defendant. Complainants further aver that they are required to forthwith vacate the premises heretofore described and move upon the premises purchased by them in the county of Saginaw; that if they should fail or neglect so to do or fail or neglect to perform their executory contract of sale by and with their said grantor that they would forfeit a large sum of money, to wit, five hundred dollars ($500), paid upon the farm lands so purchased, and would be liable for a breach of contract and they would hereby become financially ruined and distressed; that it is their intention to move upon said farm lands in Saginaw county; that they have no farm tools and utensils or other appliances necessary to farm the aforesaid described lands, and that they are financially unable to equip the aforesaid described lands for said purpose for the season of 1911; that, by reason of the premises, they have been put in dire financial; distress, and have, on account of the failure of the said defendant, been unable to procure as of their own money the necessary funds to make the payment upon the said farm lands in the county of Saginaw; that, under the present distressing circumstances, the best they are able to do in their judgment is to move upon the said farm lands in the county of Saginaw, and vacate the premises so sold as aforesaid to the said defendant; * * * that pending the determination of this cause upon the merit of this bill that a receiver should be appointed by this court to take possession of said farm lands, manage, control, and farm the same in a husbandlike manner under the order and direction of this court, and as may be determined advisable pending the determination of the court upon the merits hereof, and that the net proceeds from said farm lands shall be equitably applied in satisfaction of any amount found due the said complainants in this cause; that without it said farm lands will not be taken care of during the present season, unless suitable and necessary arrangement can hereafter otherwise be made with reference thereto.”

The bill prays for specific performance, and, in default thereof, a sale of the land for the amount due, a decree for deficiency, and the appointment of a receiver. To the bill of complaint defendant interposed a demurrer upon the grounds, among others, which do not require consideration: (1) That complainants did not perform the contract on their part in that they did not offer or tender proper abstracts of title on or before March 1, 1911; (2) that the sum of $500 as stipulated damages was agreed upon and became a substitute for performance of said contract on the part of the said defendant. The circuit judge overruled the demurrer, and defendant appeals to this court.

Defendant, having repudiated the contract, in writing and given notice that he would not further perform it before he was entitled to an abstract, waived a tender of the abstract other than as made in the bill of complaint. Witt v. Dersham, 146 Mich. 68 (109 N. W. 25).

Where a stipulation for the payment of a certain sum is in reality a penalty, it furnishes no obstacle to a specific performance of the contract. Powell v. Dwyer, 149 Mich. 141 (112 N. W. 499, 11 L. R. A. [N. S.] 978).

Where the stipulation is in reality for liquidated damages, it will be held to be in lieu of specific performance only where it appears from the whole contract to have been the intention of the parties that the right to pay the stipulated sum or perform the contract should be optional. Koch v. Streuter, 218 Ill. 546 (75 N. E. 1049, 2 L. R. A. [N. S.] 210), and note; 36 Cyc. p. 570, D.

We are satisfied that the provision in question provides for liquidated damages, and not for a penalty. Calbeck v. Ford, 140 Mich. 48 (103 N. W. 516); Township of Springwells v. Railway, 140 Mich. 277 (103 N. W. 700); Ross v. Loescher, 152 Mich. 386 (116 N. W. 193, 125 Am. St. Rep. 418). We do not think, however, that this contract can be properly construed to be a mere option agreement for the purchase of the land. Construing the clauses as to default together, it appears to have been the intention of the parties to leave it optional with the vendors whether they would accept the stipulated damages or insist upon performance of the contract.. It is not intended by this opinion to foreclose the court’s exercise of discretion upon the final hearing. See Rust v. Conrad, 47 Mich. 449 (11 N. W. 265, 41 Am. Rep. 720); Rathbone v. Groh, 137 Mich. 373 (100 N. W. 588); Chicago, etc., R. Co. v. Lane, 150 Mich. 162 (113 N. W. 22).

The order is affirmed with leave to answer in 20 days after notice of the entry of decree.

Moore, C. J., and Steers, McAlvay, Brooke, Stone, and Ostrander,. JJ., concurred. -Bird, J., did not sit.


author: Steere, J.

text:
    ZEITLER v. CONCORDIA FIRE INSURANCE CO.
    1. Insurance — Change op Interest — Estates op Decedents — Executors and Administrators — Vendor and Purchaser— Land Contract.
    Under a standard policy, issued to the estate of Katherine Munson, deceased, during probate proceedings, such a material change of title was not effected by the administrator’s entering into an executory contract of sale, but retaining possession, as to avoid the policy.
    2. Same — Notice op Conditions.
    An insurer, dealing with an administrator in charge of property in process of probate, would be presumed to have some knowledge of the nature of the proceedings, their purpose and the law applicable to them.
    3. Same.
    Such policy was an open one, designed to protect the interests of whom it might concern, of any person having a pecuniary interest in the property.
    4. Same — Land Contracts — Specipic Perpormance.
    Where the vendee had not such an interest at the time of loss as to authorize him to enforce the contract specifically, and secure possession of the premises, a material change of title had not occurred.
    5. Same — Forfeitures.
    Courts do not favor forfeitures, and will so construe contracts as to prevent them whenever it may be done without doing violence to plain stipulations.
    6. Same — Policy op Fire Insurance.
    Where possession and control of insured premises and an insurable interest are retained by the insured, an executory agreement for the sale thereof does not so violate the spirit of the contract as to render the policy void.
    Case-made from Charlevoix; Mayne, J.
    Submitted January 23, 1912.
    (Docket No. 147.)
    Decided March 29, 1912.

      Assumpsit by Charles J. Zeitler. administrator of the estate of Katherine Munson, deceased, against the Concordia Fire Insurance Company upon a policy of insurance. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      George F. & Peter J. Monaghan, for appellant.

      B. W. Kane, for appellee.
   Steere, J.

This action was brought to recover under a policy of insurance issued by'defendant, covering the barn and other buildings on an 80-acre farm in Charlevoix county; said barn being totally destroyed by fire on the 9th of October, 1910. The farm had belonged to Katherine Munson, who died in December, 1909, and plaintiff was administrator of her estate. The case was tried before the court without a jury and a judgment entered in favor of the plaintiff for $500 with interest.

The material facts in the case are undisputed. Up to the time of the fire in question, Peter Munson, husband of said Katherine Munson, deceased, lived upon and was in possession of said farm. On May 5, 1910, the defendant issued to the “estate of Katherine Munson, deceased, a policy of insurance in the sum of $1,800 for the term of three years.” By this policy the dwelling house on said farm was insured for $800 and the barn for $500. The policy is a Michigan standard policy, providing, among other things, as follows:

“This entire policy, unless otherwise provided by agreement, indorsed hereon, shall be void * * * if the interest of the insured be other than unconditional and sole ownership * * * or if any change, other than by the death of the insured, takes place in interest, title or possession of the subject of insurance (except change of occupants without increase of hazard), whether by legal process, or judgment, by voluntary act of the insured, or otherwise.”

Before this policy was issued, and on the 2d of May, 1910, the plaintiff, acting as administrator of the estate of said. Katherine Munson, applied for and obtained from the probate court for the county of Charlevoix a license to sell the farm on which said barn was situated.

On the 2d of June, 1910, about a month after the policy was issued, plaintiff, under said license, entered into a contract with one William O. Ward for the sale of said property, giving a land contract in the usual form. This contract was executed and delivered on the day stated; the plaintiff, as administrator, agreeing to sell to said Ward, and said Ward agreeing to purchase, the property for the sum of $2,500, payable $160 down, $1,340 on or before July 1, 1910, and the balance of $1,000 on or before June 1, 1911. On or before July 1, 1910 the sum of $1,500 had been paid on said contract. Possession of the premises was not to be given to said Ward until the 1st of December, 1910.

By the terms of said contract, it was agreed that this insurance policy should be turned over by plaintiff to Ward upon full performance of his part of the contract; that, in the meantime, if any loss occurred, it should be payable to the plaintiff and the second party as their respective interests appear, it being agreed, however, that the moneys arising from such loss should be available to pay for repairing or rebuilding any structures affected by the loss.

This sale was confirmed by the probate court of Charlevoix county on the 13th of June, 1910. The order of confirmation contained a proper recital of the facts. Ward made full payment on the contract subsequent to the fire and received a deed from the administrator on the 5th of December, 1910.

It is undisputed that no request was made to the company for permission to sell, and the defendant company had no actual notice of this contract of sale of the premises to Ward. No change of any character was made in the policy subsequent to its issue. It is undisputed that the barn covered by this .policy was totally destroyed, and its value exceeded $500. It is also conceded that proper proof of loss was made under the policy.

Plaintiff’s declaration is in the usual form, counting upon the policy of insurance. The defendant, under the plea of the general issue, gave notice that by reason of the sale of the property there was such a change in interest and title of the subject of insurance as to effect a forfeiture; that the defendant had no actual knowledge and was not chargeable with knowledge of the proceedings had in the probate court touching the matter of the estate of Katherine Munson and the sale of the property in question, and therefore said company was justified in refusing to pay the loss suffered by reason of the destruction of the property by fire.

Defendant’s assignments of error relate to rulings of the court in refusing to find according to the various requests presented in behalf of the defense and in making certain findings, which resulted in the judgment rendered. They all revolve around the one question of forfeiture by reason of sale in violation of stipulations in the policy.

At the time of issuing the policy, the property insured belonged to the heirs of Katherine. Munson, whoever they might be, subject to any debts owing by her when she died, or any expenses incurred in connection with the property she left. This property was in the hands of the administrator, being administered under direction of the probate court. A petition for leave to sell the property to pay debts of the estate had been filed. The proceedings of the court, in administering the estate, were the usual and necessary steps for páying debts and expenses and distributing property of a deceased person, and the records of the proceedings of the court were public records.

It must be presumed that any one dealing with an official in charge of such property, under such conditions, would have some knowledge of the nature of the proceedings, their purpose, and the law applicable to them. The administrator did not own the property, and had no interest in it except to perform his official duty in that connection, as an agency of the probate court. Neither the actual owner of the property or creditors of the estate are named in the policy or were known to the insurer, so far as disclosed. The business was done with the administrator, necessarily known to be a temporary official in charge while the property was going through the probate court. The policy was issued in omnibus form to an entity designated “the estate of Katherine Munson.” It was, in effect, an open policy, to protect the interests of whom it might concern; any living parties having a pecuninary interest therein.

Under such conditions, we are led to inquire if the rules of construction which are adopted in some cases in some jurisdictions, as to the provisions in a policy touching “ any change in interest, * * * title, or possession of the subject of insurance,” are controlling here.

The matter of possession is always regarded of importance in cases of this kind. The legal title, the control, and the possession of this property remained, at the time of the fire, exactly the same as when the policy was issued. Before it was issued, steps had been initiated looking to a sale of the property to pay creditors, and at the time of the fire those steps had progressed to an executory contract providing for a deed of the property, assignment of the insurance policy, and delivery of possession to a certain vendee at a future period, in case he performed on his part and paid the full purchase price. It was a contingency which might or might not happen. At the time of the loss, he had neither legal title nor right to the possession.

One of the tests recognized by the courts, as applied to this question, is whether or not the vendee could enforce specific performance of the contract, holding in such case that, if he could, there had been a material change in interest which would invalidate the policy. That rule is a reasonable one when construed as meaning the legal right to enforce conveyance of title and delivery of possession at the time of the loss.

In the case at bar there was not, at the time of the fire, an outstanding contract under which, as the facts then existed, the vendee could enforce specific performance. He could not at that time enforce conveyance of title to him or get possession.

The contract of insurance in this case is a “ Michigan Standard Policy” — a form of insurance policy adopted and promulgated by statutory authority for general use throughout the State. It would be narrow and unjustly technical to hold that the form of words adopted for such a policy is inelastic and must have an exact and definite meaning by strict construction, always conveying the same understanding between the parties under all varying circumstances. We think such contracts should be construed with reference to the relations of the parties and the character and situation of the property insured. The court should interpret those forfeiture clauses in the light of the facts and circumstances- proven, within proper limits, having in mind the ordinary meaning of the language found in them as applied to the purpose for which the contract was made.

It is a general rule of construction that the courts do not favor forfeitures, and will so construe contracts as to prevent them whenever it can be done without doing violence to plain contract stipulations.

Under the facts admitted, we must assume in this case that it was the understanding between the parties that the estate’s insurable interest in this property, in consideration of the premium which the estate paid, should be protected from fire while in the hands of the administrator passing through probate. The contract should be construed as having been made for that purpose. Ostrander on Fire Insurance, § 67.

Special knowledge or notice, by or to the company’s agent, cannot affect or supersede the written policy; but the policy itself, issued by the company, designating an estate as beneficiary, imputes to the insurer some knowledge of the special conditions surrounding the property insured. Irrespective of the claim of constructive notice of the license to sell, defendant is presumed to know, when insuring an estate, that it is dealing with a temporary condition of property of inheritance which must terminate by sale or distribution of such property, and makes the contract conformable to, and to be construed in the light of, the relations of the parties and circumstances surrounding the property insured.

The cases dealing with conditions in fire insurance policies which involve avoidance in case of breach are numerous. Many are at variance, not only by reason of distinct provisions of the different classes under consideration, but there is a lack of harmony where the conditions are the same. Clauses like those in the Michigan standard policy, rendering the same void in the case of change in the interest, title, or possession of the insured property, are now in general use.

Although there is some conflict upon the question, the weight of authority recognizes the general rule that, where possession and control of the property and an insurable interest are retained by the insured, an executory agreement for its sale does not so violate the spirit of such conditions as to render the policy void.

It is claimed tnis question is passed upon- to the contrary in Michigan, and the case of Excelsior Foundry Co. v. Assurance Co., 135 Mich. 467 (98 N. W. 9), is cited in support of that contention. This case is also found in volume 3, Am. & Eng. Ann. Cas. 707, followed by a review of numerous authorities on the subject. The Excelsior Case recognizes that a conflict of authority exists on the question of whether a policy like the Michigan standard policy is rendered void in case the insured gives an executory contract for the sale of ,he property ; but the court was not required to pass upon that question in deciding the case. The testimony in that case showed that the insured, at the time of obtaining the policy, did not own the fee of the property, but simply held it by a land contract; that previous to the fire the contract had been reassigned to the owner of the fee, who had deeded the property to others, whose title in fee had been recorded, therefore the action of the circuit judge in holding that there had been such a material change in the interest of the insured as avoided the policy was sustained. Dull v. Insurance Co., 159 Mich. 671 (124 N. W. 533), went no further than to hold that a policy was void because the insured, at the time the policy was issued, was not the sole and unconditional owner as represented. The question before us is not foreclosed by any previous decisions in this court.

In Garner v. Insurance Co., 73 Kan. 127 (84 Pac. 717, 4 L. R. A. [N. S.] 654, 117 Am. St. Rep. 460, 9 Am. & Eng. Ann. Cas. 459), a forfeiture was refused under a policy containing a forfeiture clause, identical with the one before us, where the insured held the legal title and possession of the property, although he had given an executory contract to sell and had been paid the full purchase price. It was there said:

“ It has been held that an executory contract to convey insured real estate does not operate as a forfeiture of the policy under a provision that it should be void ‘ if the interest of the assured be or become other than the entire, unconditional, unencumbered and sole ownership of the property,’ (Arkansas Fire Ins. Co. v. Wilson, 67 Ark. 553 [55 S. W. 933, 48 L. R. A. 510, 77 Am. St. Rep. 129]; Franklin Ins. Co. v. Feist, 31 Ind. App. 390 [68 N. E. 188]); or where the condition of the policy is that it shall be void in case ‘ the property be sold or transferred or any change take place in the title or possession.’ (Browning v. Insurance Co., 71 N. Y. 508 [27 Am. Rep. 86]); or ‘if any change take place in the interest, title, or possession of the subject of insurance.’ (Erb v. Insurance Co., 98 Iowa, 606 [67 N. W. 583, 40 L. R. A. 845]; Insurance Co. v. Tompkies & Co., 30 Tex. Civ. App. 404 [71 S. W. 812]).”

In disposing of this case we are not required to either reject the above rule or recognize it as an inflexible one of universal application. In fire insurance the moral hazard, as well as the physical, is recognized as an important factor. The legitimate object of, and primary reason for, the restrictive clauses in a policy is the protection of the insurer against risks materially different from those undertaken at the time of issuing the policy. To that end the insurer is entitled to insist on a continuance of the personal vigilance, possession, supervision, control, care, and moral responsibility in relation to the property stipulated in the contract. In this case the insured was an estate, and the contract must be presumed to have been made with reference to the usual changing conditions of property in the hands of an administrator, passing through probate. At the time of the fire, it was yet in his hands, passing through probate, and the legal title was in the estate, which yet had an insurable interest in excess of the loss. The legal title, possession, care, custody, and moral and physical hazard were unchanged.

Forfeiture is a mixed question of law and fact. The provisions of a policy against a change of interest are to be construed with reference to both the circumstances of the case and the object of the clause, and with strictness against the insurer. The insured, being an estate, still having an insurable interest in the property, with legal title and possession, under the same caretaker and maintaining the same physical conditions, we are constrained to hold that the restrictive clause was not so violated as to work a forfeiture.

The learned circuit judge was not in error in finding, “under the facts stipulated neither the moral nor physical hazard of the risk was increased,” and his judgment construing the contract in favor of indemnity and against forfeiture is affirmed.

Moore, C. J., and Brooke and Stone, JJ., concurred. McAlvay, Blair, and Ostrander, JJ., concurred in the result. Bird, J., did not sit.


text:
    SERVISS v. ANN ARBOR RAILROAD CO.
    1. Carriers — Railroads—Stations—Platforms.
    Evidence that plaintiff, in alighting from defendant's passenger train, stepped on a loose bolt and burr about one and one-half inches long that was lying on the platform, but was not shown to have been there for any given period, or to have been negligently left at that place, was insufficient to charge defendant with negligence.
    3. Same.
    The relation of common carrier and passenger existed while plaintiff was alighting from the train: defendant was charged with the duty of providing and maintaining reasonably safe patforms.

    8. Same — Evidence—Presumptions.
    No presumption of negligence could arise from proof of suoh an accident.
    Error to Shiawassee; Miner, J.
    Submitted January-24, 1912.
    (Docket No. 5.)
    Decided March 29, 1912.
    Case by Warren B. Serviss against the Ann Arbor Railroad Company for personal injuries. Judgment for plaintiff. Defendant brings error.
    Reversed.

      Ghistavus Ohlinger and Seth Q. Pulver {Alex. L. Smith, of counsel), for appellant.

      Odell Chapman, for appellee.

       Duty to guide or conduct passenger to or from train, see note in 30 L. R. A. (N. S.) 1041,

   Steere, J.

This action is brought by plaintiff to recover damages for personal injuries claimed to have been sustained on September 26, 1910, while alighting from defendant’s train at its station in the city of Owosso, Mich.

Plaintiff was superintendent of the Union Telephone Company, and had been in its employ for about nine years. In the line of his business, he took passage on a train of defendant at Mt. Pleasant to ride to Owosso, and paid his fare. The train arrived at its station at Owosso at 10:20 in the evening. Plaintiff testified that when alighting from the car to the platform in front of the station he stepped with his left foot on a loose nut about an inch and a quarter square, through which extended a broken bolt an inch and a half long. He says:

“I stepped down with my left foot first and' stepped onto something. It rolled out from under my foot, at the time the heel of my other foot was on the step of the car; my foot struck the burr, and my foot went out from under me and I struck on it. I fell. I struck the end of my spine on that burr. * * * I don’t know what position the burr was in when I stepped on it. It' was on the platform under me and I reached under me and got it.”

It was claimed the burr was part of the equipment of defendant, and plaintiff was asked by his counsel:

“Q. What can you say as to there being such bolts and burrs as that used in the general, equipment of a railroad ?
“A. I have often seen such burrs as that around the tracks lots of times; not, I would say, just that size.
Q. What do you say as to whether or not that is such a material as is like the equipments of railroads as to bolts and nuts ? (Objected to as immaterial.)
The Court: He may answer.
“A. It is.”

Cross-examination:

“Q. You have never seen this size of burr used in connection with the railroad equipment, have you ?
‘‘A. I think I have.
“Q. Didn’t you state on your direct examination that you had not seen that particular size ?
“A. I did not know as it was that particular size.
“Q. What?
“A. I said I didn’t know as it was that particular size.
“Q. You don’t remember of ever having seen that particular size of burr used in railroad operations, do you ?
“A. I never measured them at the time and would not know.
“Q. Answer the question.
“A. I don’t know.
,l‘Q. You don’t know.
“A. No, sir; there are three railroads in Owosso, the Grand Trunk, Michigan Central, and Ann Arbor. There is an electric road running between Owosso and Corunna, and there was in process of construction at the time of this accident a railroad from Lansing to Owosso known as the Lansing & Northeastern.”

On redirect examination plaintiff further testified:

“The street railroad would be about eight rods east of where I got hurt. I have observed the plate bolt where the joints of railroads are fastened together by bolts and a plate. I have never measured any of those bolts to see how they compare in size with this bolt. I don’t know what size they are on the Ann Arbor.”

Cross-examination:

“ The platform at Ann Arbor depot is cement. I don’t know how it is lighted. The platform is a cement sidewalk; runs nearly out to the tracks. On the occasion of the accident, it was covered with cinders.”

Redirect examination:

“ I did not see this bolt or burr before I stepped on it, and I didn’t know it was there. I believed that the place where I was alighting was reasonably safe.”

Milford Howell, the only other witness to the accident, testified he did not know just how it happened, but plaintiff seemed to fall from the steps and began to fall before he stepped upon the walk; that he fell while on the steps of the car, and not while stepping onto the platform.

This is substantially all of plaintiff’s testimony touching the accident and its cause. He and other witnesses testified as to the nature and extent of his injuries.

At the conclusion of plaintiff’s testimony, defendant rested its case without introducing any evidence. Defendant’s counsel made the following motion:

“ The defendant at this time wishes to move to direct a verdict in its favor on the ground that no negligence whatever has been shown upon the part of the defendant by the proofs adduced by the plaintiff. It has not yet been shown by the plaintiff where the bolt and burr came from, or how long it had been on the platform; and this is not a case in which the doctrine of res ipsa loquitur should apply. It is not shown that this bolt and burr had been placed there voluntarily by an employe of this company; there is no testimony that this bolt and burr had been there one minute before Mr. Serviss stepped upon it; it has not been shown but what the bolt and burr might have been picked up just before the arrival of that train by some trespasser or by some child or by some one else and thrown upon the platform in play. Furthermore, this bolt is not an obstruction under the law.”

This motion was denied and the case submitted to the jury, a verdict being rendered in favor of plaintiff for $500. In his charge, the court instructed the jury, among other things, as follows:

“If you find that plaintiff himself was not guilty of any negligence in getting down off from the platform or getting down from the steps onto the platform, which in any way contributed to the injury, and you find that the rolling of this bolt, or this bolt being upon the platform, and you should find that defendant (plaintiff) stepped upon that bolt, as he stepped down one foot onto the platform, and you find that the rolling of that bolt under him gave way, and by reason thereof he was thrown to the platform and was injured, and that the rolling of said bolt or stepping on said bolt and its rolling was the proximate cause — that is, the real cause of the injury — then plaintiff would be entitled to recover.”

A motion was made for a new trial which was denied, and the case was removed to this court by writ of error.

The questions of plaintiff’s contributory negligence and whether or not his fall was caused by stepping on the burr were unquestionably issues of fact. The court instructed the jury squarely that, if his fall resulted from stepping on the bolt, he was entitled to recover.

There was no evidence how long the object had lain on the platform, where it came from, or how it got there. It was an ordinary threaded burr, or nut, with no marked peculiarities, having in it a fragment of its broken counterpart — a small piece of scrap iron which might be concealed in a closed hand and easily kicked or tossed about. Nuts and bolts are found and used in an endless variety of places and appliances. Plaintiff’s testimony that he had seen such around the tracks lots of times, and it was like the equipments of railroads as to nuts and bolts, does not, without further identification, have probative force raising an issue of fact as to this being a part of the equipment of defendant, a careless use of which by employés might imperil the safety of passengers.

That the relation of common carrier and passenger yet existed between the parties, while defendant was alighting from the train, is beyond question. The rule is well stated in Brassell v. Railroad Co., 84 N. Y. 241:

“A passenger, when taking or leaving a railroad car at a station, has the right to assume that the company will not expose him to unnecessary danger; and, while he must himself exercise reasonable care, his watchfulness is naturally diminished by his reliance upon the discharge by the company of its duty to passengers to provide them a safe passage to and from the train.”

A company is required to provide and maintain reasonably safe platforms and conveniences for its passengers taking or leaving trains, and, where there are no platforms at the stopping places of trains, it is the duty of its servants to assist passengers to alight. If for want of such assistance a passenger is injured at such a place, without fault on his part, the railway is liable. Memphis, etc., R. Co. v. Whitfield, 44 Miss. 466 (7 Am. Rep. 699). The peril of moving trains, however, is not involved in this proposition. The specific question raised is the duty owed by a common carrier to its passengers while getting off, or on, at a platform while the train is not in motion.

In the case at bar no question is raised as to a suitable platform, properly lighted. The train was stationary when plaintiff left it. A small, loose article happened to be lying on the platform where he alighted. It was manifestly so small as not to be noticed by the casual observer, otherwise plaintiff was negligent in not observing and avoiding it. Had it been observed by employés of defendant, or remained there a sufficient time to raise the presumption that they ought to have seen it, negligence might be imputed to the company for not removing it.

Under the charge of the court, defendant would be liable in case plaintiff, without negligence, stepped on it and was thereby hurt, if it had been dropped there a moment before, by another passenger or bystander. Its presence there is entirely unaccounted for. There is a total failure of proof that defendant’s servants dropped it or that it had been there any length of time.

Negligence cannot be predicated on the single fact that it was there when he alighted. A presumption of negligence cannot arise from mere proof of such an accident. When the injury is connected with defective or unsafe machinery or appliances, or some improper conduct in the operating or management of a particular business, carrying with it exclusive knowledge of the cause of such injury, a presumption of negligence may arise. No special knowledge on the part of the defendant as to the cause of plaintiff’s fall is manifest. The cause was as well or better known to plaintiff than to defendant.

Plaintiff urges that the high degree of care imposed upon a common carrier, in receiving and discharging passengers, required defendant to set plaintiff down safely if human foresight could do so, and that due care under such circumstances required defendant’s servants to see and remove the burr before passengers alighted. The degree of care required of the common carrier at such times and places is stated, and numerous authorities cited in Crowe v. Railroad, 142 Mich. 692 (106 N. W. 395). It is there intimated that a single chunk of coal, at the point of alighting, if unaccounted for, would not be a basis on which to predicate negligence.

In Scholtz v. Rapid Transit Co., 48 Misc. Rep. 619 (95 N. Y. Supp. 557), in speaking of an iron gate two feet square and two inches thick lying on the station platform, and over which a passenger fell, the court said:

"This is not a case where the defect — the physical cause of the injury — bore an indication of its continued presence for an appreciable interval of time. The article itself, in view of its size, weight, and form, told no story of difficulty — hence of time — in its movement toward or placing upon the platform; and, conjecture aside, there is no room for a mental process to define an interval during which reasonable prudence could or should have been at work to protect this plaintiff from this particular hazard. The obstruction may have been placed or suffered to remain upon the platform by a servant of the defendant, or it may have been carried or thrown down by a fellow-passenger of the plaintiff a moment before he reached the place of his injury. Either contingency is possible, each is founded in conjecture, and neither is to be preferred as a matter of lawful inference.”

This reasoning would apply much more forcibly to a small burr or nut, as in this case, or a chunk of coal as in the Crowe Case, or a wooden bung of a barrel as in the case of Bernhardt v. Railroad, 159 Pa. 360 (28 Atl. 140). In the latter case the plaintiff, a woman passenger from a train at defendant’s station, stepped upon a small, round piece of wood two-thirds of an inch in diameter and two inches long, supposed to have been used for stopping a hole in a keg or cask, fell, and was injured. The court held that the mere presence of such an object at the place of disembarking, with no further proof as to how it came there or how long it had been there, did not make a prima facie case of negligence. Under these authorities, we think the jury should have been instructed that plaintiff’s evidence did not establish actionable negligence on the part of defendant.

The judgment is reversed, and a new trial granted.

Moore, C. J., and MoAlvay, Brooke, Blair, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


author: Ostrander, J.

text:
    PRESTON v. NATIONAL BANK OF IONIA.
    1. Evidence — Explanatory Testimony — Written Documents—
    Parol Evidence.
    It is competent to introduce parol testimony to explain and interpret written documents.
    2. Injunction — Bills and Notes — Check—Restraining Payment.
    Complainant offered to purchase assets of an insolvent at judicial sale for 866,906.78. He also offered defendant, one of the • principal creditors, 50 per cent, of its claims for an assignment thereof, provided his bid for the property was accepted and his sale confirmed. His offer was accepted by the creditor and the property was struck off to him, the sale confirmed by the court, and later, on petition of certain creditors, was set aside. Pursuant to complainant’s arrangement, he forwarded a certified check, indorsed subject to the agreed conditions; which, being paid by mistake by the drawee bank to another bank, that presented the check for collection, payment to the defendant creditor was enjoined pending the determination of suit. The property of the insolvent was later sold at a higher price to another bidder. Held, that the injunction was properly made permanent, as complainant’s offer to defendant creditor was made on the contingency that he obtain title to the insolvent estate by reason of his bid of 866,906.78.
    Appeal from Ionia; Davis, J.
    Submitted January 29, 1912.
    ( Docket No. 50.)
    Decided March 29, 1912.
    Bill by Thad. B. Preston against the National Bank of Ionia, Michigan, and the First National Bank of Traverse City for an injunction to restrain the payment of money upon a certified check. From a decree for complainant, defendant appeals.
    Affirmed.

      Thomas Smurthwaite (E. M. Davis, of counsel), for appellants.

      George E. Nichols (R. A. Hawley, of counsel), for appellee.
   Ostrander, J.

The material facts are practically undisputed. The defendant First National Bank of Traverse City, Michigan, held complainant’s check for $2,787, drawn on the State Savings Bank of Ionia, Mich., certified by that bank April 14, 1909, upon the back of which check was indorsed:

“ Pay to 1st Natl. Bank Traverse City, Mich., subject to terms of my letter Apr. 14-09. T. B. Preston.”

Said defendant bank received said check in a letter, which reads as follows:

“Ionia, Mich., 4-14-09.
“ First National Bank,
“ Traverse City, Mich.
Gentlemen:
“Pursuant to an arrangement made with you by Mr. Nichols, I am enclosing you certified check for $2,787.00 which is to be paid to you when the title to the South Side Lumber Company is confirmed by the court and the transfer properly made to me in full settlement of the claim held by you against the said South Side Lumber Company, which claim, with interest, amounts to $5,575.00. This is subject to any revision as to any slight difference there may be in the amount due at the time of the transfer. Please signify your acceptance of it and the conditions covering it.
“Yours truly,
“T. B. Preston.”

Receipt of the check was acknowledged by the following letter:

“4-15-09.
“T. B. Preston, Ionia, Mich.
Dear Sir:
“We are in receipt of yours of the 14th with inclosure of certified check for $2,787.00 according to the arrangement made by Mr. Nichols in your behalf.
“ Yours truly,
“ Leon F. Titus, Cashier.”

A bid which complainant had made for the property of the South Side Lumber Company to the receiver of said company was confirmed by the court. Thereafter, upon the application of certain creditors, the order confirming the sale was set aside, the property was again offered for sale, and was bid in for a much larger sum than that offered by complainant by one John F. Ott, who conveyed the same, or caused it to be conveyed, to the South Side Company, a corporation organized on the evening of the day when the sale to complainant was confirmed — that is, June 5, 1909, in which complainant is principal stockholder. July 9, 1909, complainant wrote to the First National Bank of Traverse City a letter, which, with the reply thereto, is here set out:

“Ionia, Mich., 7-9-09.
“First National Bank,
“Traverse City, Mich.
Gentlemen:
“ On the 14th of April, 1909, I sent you certified check for $2,787.00 under the following conditions:
“ To be held by you and not used until the sale of the entire property of the South Side Lumber Company was confirmed by the court and the papers properly executed and the transfer made to me. These conditions were in pursuance of an agreement made between us April 10, 1909, and this agreement was made in view of a bid I made for the properties and assets of the South Side Lumber Company of $66,906.78 which you had notice of. The property of said company was struck off to me the 28th of May, and the court confirmed the sale June 5th, but before title was conveyed to me by the receiver the court, on application of certain creditors, vacated the whole matter and ordered resale, and of all these matters you had notice.
“ Therefore, by reason of the action of the court, our negotiations are ended and the contract canceled and I, therefore, respectfully demand the return of the certified check inasmuch as the provisions under which it was delivered to you have not been met.
“Kindly let me hear from you at once, and oblige,
“Yours truly,
“T. B. Preston.”
“July 14, 1909.
“T. B. Preston, Esq.,
“Ionia, Mich.
“Dear Sir:
“In reply to yours of the ninth inst. your proposition to us of April 10th was as follows: ‘ I will pay you fifty cents cash on the dollar for your present claims against the South Side Lbr. Co., payment to be made when the title to said property under receiver’s sale is confirmed in me by the court.’
“ This proposition was accepted by us on condition that certified check for the amount offered was deposited with us, and you complied with that condition.
“ On June 5th, 1909, the receiver’s sale of the property to you was confirmed by the court and our agreement was then fully performed and consummated and we have been at all times since and are now ready and willing to transfer to you by delivery all papers and claims held by us against the South Side Lbr. Co., as agreed.
“We are aware that the order of the court confirming the sale to you was afterwards set aside by the court, but this was upon the express condition that you be paid all damages and loss occasioned by the last order of the court. You, therefore, have an undisputable claim against the receiver for any loss you suffer through your dealings with us, if any such loss there be, while we would have no remedy whatever. We do not think you are entitled to the return of the moneys paid to us on this agreement and we feel assured that upon reconsideration you will see that you should demand payment of your loss, if any, from the receiver and the same will be paid out of the funds received through the increased bid to obtain which the court set aside the order confirming the sale to you.
“Yours very truly,
“Leon F. Titus, Cashier.”

Later the check was sent to Ionia for collection, was there paid, it is claimed by mistake, the moneys passing into the hands of the defendant National Bank of Ionia, Mich., for the defendant First National Bank of Traverse City. Complainant filed his bill, praying that the National Bank of Ionia be enjoined from remitting or paying the money to the First National Bank of Traverse City, and be required to return the money to the State Savings Bank of Ionia, and that the First National Bank of Traverse City be required to surrender the check to complainant to be canceled, and for other relief. The cause being put at issue and coming on to be heard, a decree was entered directing the National Bank of Ionia to pay to complainant said money and directing the First National Bank of Traverse City to pay to complainant interest on the money at 5 per cent, from June 29, 1910. The National Bank of Ionia was further directed to deliver to complainant the said- check.

The following additional facts may be stated: The South Side Lumber Company, a Michigan corporation, having its principal office at Traverse City, Mich., became insolvent, ánd a receiver of the assets of said company was appointed December 17, 1907. The receiver continued to carry on the business of the company. In April, 1909, complainant submitted to the receiver a bid for all of the property and assets of the corporation as of April 1, 1909, agreeing to pay therefor in cash $66,906.78. A committee had been appointed by the creditors. This committee consisted of H. S. Hull, president of the People’s Savings Bank, Leon F. Titus, cashier of the First National Bank of Traverse City, and W. P. Porter, of East Jordan, Mich. The matter was presented to the court, and a hearing was had, at which a large number of creditors attended, and an order was made reciting that it was for the interest of the company and the creditors that the property be sold, and that complainant’s bid be accepted unless the receiver received a higher bid; the sale, if made, however, to be subject to confirmation by the court. The receiver offered the property for sale, the complainant’s bid was the only one presented, and the property was struck off to him. Confirmation of this sale was opposed, but, after consideration, it was confirmed by the court.

A few days later, certain creditors asked to have the order confirming the sale set aside and the receiver restrained from conveying the property to complainant. Upon this petition an order to show cause was made, and there was a hearing. The order of confirmation was set aside upon certain conditions. A communication was received from J. F. Ott and others to the effect that if the assets of the said South Side Lumber Company should be again offered for sale, they would bid $82,000 for the same, the assets to be taken as of April 1,1909, and they would further agree to fulfill and carry out all contracts made by the receiver. Complainant opposed the making of the order setting aside the order of confirmation and sought in this court, but unsuccessfully, a writ of mandamus to compel the setting aside of said order. A subsequent sale was had, as has been stated. The South Side Company was a corporation organized to take over the South Side Lumber .Company property and business. Complainant furnished the money to carry out the terms of the bid upon the sale to Mr. Ott. We think the case a simple one.

The written evidence supplies the most of the facts. Oral testimony sufficient to show to what the writings referred, and precisely what the parties contemplated, was necessarily and properly admitted. The circuit judge was of opinion that because Leon F. Titus, cashier of the First National Bank of Traverse City, and H. S. Hull, president of the People’s Saving Bank, were two of three members of a creditors’ committee, both banks considerable creditors of the insolvent corporation, because, also, the bid made by complainant would have resulted in paying the said banks much less than 50 cents on the dollar of their respective claims, and because complainant had offered other unsecured creditors of the insolvent corporation 30 cents on the dollar for their claims, the contract made between complainant and the banks, including the First National Bank of Traverse City, was calculated to influence two members at least of the creditors’ committee to recommend to the court the acceptance of complainant’s bid, for which reason the whole contract was void as against public policy.

This theory of a recovery is not advanced in the bill of complaint, and, so far as we can ascertain, was not advanced by counsel for the complainant. We think it unnecessary to consider it.

In connection with the written evidence of what the contract of the parties was, the oral testimony shows, beyond dispute, that complainant had made a bid for the property; that it was the only bid which had been made by any one; that it was acceptable to two members at least of the creditors’ committee, who proposed to and did present it to the court; and that a sale was therefore ordered, and the property struck off to complainant for the amount of the contemplated and proposed bid. We conclude that it was the understanding that the offer to pay 50 cents on the dollar for the claim of the bank was made with reference to said bid, and not to any other bid. Nor does it seem necessary to present an argument to prove that unless the sale to complainant was not only confirmed, but he was permitted to hold and be put in possession of and to gain title to the property for which he bid, his obligation did not require him to buy the claim. The amount complainant had agreed to pay upon contingency was not lost by him, and could have afforded no justification for a demand upon the receiver under the order of the court. Defendant First National Bank of Traverse City has lost nothing on account of any act or default of the complainant. It had, and still has, its claim against the South Side Lumber Company. It has not received 50 cents on the dollar for its claim from the complainant, and it ought not to receive it, because the circumstances under which the money was to be paid have never arisen. It is said, however, that complainant did buy the property, and that for all purposes of equitable consideration he now owns and controls the title. The title was taken, as has been stated, by the South Side Company. We have answered this contention substantially in saying that we find the contract of the parties to have been made with reference to a bid of $66,906.78, for which sum complainant was to acquire the property.

The decree is affirmed, with costs to appellee.

Moore, C. J., and Steers, McAlvay, Brooke, Blair, and Stone, JJ., concurred. Bird, J., did not sit.


author: Bird, J.

text:
      In re KEMP’S ESTATE. KEMP v. DANDISON.
    1. Wills — Evidence—Ambiguity.
    A clause in a will, giving to testator’s daughter the residue of his property, “consisting in part of notes” against testator’s son, amounting to $1,700, was not so ambiguous as to require the aid of parol testimony.
    2. Same — Specific Bequest — Residuary Clause.
    The enumeration of specifio articles in a residuary clause will not make the bequest specifio as to those articles.
    3. Same.
    If they are so enumerated as to distinguish them from the residue by the use of such phrases as “together with,” “ as well as,” the bequest becomes specific.
    A Same.
    But since testator indicated that the notes were considered by him as a part of the residue, by employing the phrase “ consisting in part of,” the notes cannot be treated as a specifio bequest, in determining whether to abate the daughter’s legacy in order to pay the widow the sum of $1,500, bequeathed by a preceding clause in the will.
    Error to Oakland; Smith, J.
    Submitted January 24, 1912.
    (Docket No. 79.)
    Decided March 29, 1912.

      Lucy Kemp, executrix of the estate of Obadiah Kemp, presented to the probate court for Oakland county for allowance her final account which was, in part, disallowed. Said executrix appealed to the circuit court. The order being affirmed, the executrix brings error.
    Reversed.

      K. P. Rockwell and II. M. Zimmerman, for appellant.

      Arthur R. Tripp and Aaron Perry, for appellee.
   Bird, J.

This case involves the construction of the third and fourth clauses of the last will and testament of Obadiah Kemp, deceased. The will is as follows:

“First. — I direct that all my just debts and expenses be paid.
“Second. — I give, devise and bequeath to my wife, Lucy Kemp, the homestead where we now live, viz.: The southwest quarter of the southeast quarter of section twenty-two, in town three north of range ten east, Oakland county, Michigan, forever, together with the household goods and furniture and household articles and belongings contained in our dwelling house situate thereon, and together with my horse and buggy and farming tools and implements and other articles of personal property contained in and the barns and out-buildings on said premises.
Third. — I also give and devise to my wife aforesaid the sum of fifteen hundred dollars, to be paid to her within * * * after my decease from the proceeds of any notes or mortgages belonging to my estate or from any other property of my estate; also I devise to her lot 5, block 5, Rundel’s addition, city of Pontiac, said county.
“Third. — Having already given to my son, William H. Kemp, by the terms of a contract, the southwest quarter of the northeast quarter of section twenty-seven, in town three north of range ten east, county of Oakland, State of Michigan, the same to be his at my death on certain conditions specified in the contract, I do now devise the same to him absolutely forever.
“Fourth. — All the rest, residue and remainder of my property real and personal, consisting in part of notes against my said son, William H. Kemp, amounting to seventeen hundred dollars principal, I give, devise and bequeath to my daugher, Fanny Dandison.
“Fifth. — Should any person or persons attempt to contest the validity of this will, then all devises and bequests herein in favor of such person or persons shall be utterly void and of no effect, and such person or persons and their children shall have no share in my estate whatever, and such share or shares shall go to the other next nearest heirs at law.
“Sixth. — I hereby nominate my said wife, Lucy Kemp, to be the executrix of this will.”

The estate was administered by the widow, and, upon the hearing of her final account in probate court, it developed that there were insufficient assets in the estate to pay the general legacy of $1,500 to herself, without using the proceeds of the notes mentioned in the residuary clause. It therefore became a question as to which legacy should abate.

Counsel for the widow contend that the notes are a part of the residuary fund, and that the general rule should apply and the general legacy be preferred to the residuary legacy. Counsel for the daughter admit the general rule, but insist that this is an exception to the general rule; that in this residuary clause the testator has created a specific legacy of the notes of William H. and given them to the daughter, and that this specific legacy should not abate in the interest of the general legacy.

On the trial in the circuit court, parol testimony was received to aid the court in determining what is claimed to be an ambiguity in the will. While the construction of clause 4 is not free from doubt, we do not think it is involved in such doubt as would warrant us in resorting to extrinsic evidence to aid in its construction.

It is an unusual practice in the preparation of wills to create a specific bequest in the residuary clause; but the cardinal thing to be kept in mind is the intention of the testator, and, if it is clear that the testator so intended it, the provision should be given effect. This court recently gave effect to such a provision. In re Corby’s Estate, 154 Mich. 353 (117 N. W. 906). The general rule, however, is that an enumeration of specific articles in a residuary clause will not make the bequest specific as to such articles. Le Rougetel v. Mann, 63 N. H. 472 (3 Atl. 746); Estate of Painter, 150 Cal. 498 (89 Pac. 98, 11 Am. & Eng. Ann. Cas. 760); Stehn v. Hayssen, 124 Wis. 583 (102 N. W. 1074). But the gift .is specific, if the specified things are so enumerated as to distinguish them from the residue, as by the use of such words as “together with,” “as well as,” and “also.” 18 Am. & Eng. Enc. Law (2d Ed.), p. 716.

The testator has made specific mention of the notes, and this is relied upon by counsel to establish a specific bequest. The strength of this argument is overcome, when the testator refers to the notes as being a part of the residue of the estate. The language “ consisting in part of ” rebuts the idea that he intended to segregate the notes from the residuum of the estate and make a specific bequest of them. It is an express declaration of his intention that they shall be a part of the residue of the estate. It will be observed that the testator does not follow his reference to the notes by a direct gift of them to her, but refers to them as a part of the residue of the estate which he has given to her. We cannot hold that clause four makes the daughter a specific as well as a residuary legatee. Our conclusion is that the notes are a part of the residue of the estate.

The judgment of the trial court is reversed, and a new trial ordered.

Brooke, Blair, Stone, and Ostrander, JJ., concurred.


author: Moore, C. J.

text:
    SCHEIDT v. ROE.
    Specific Performance — Oral Contract — Part Performance— Landlord and Tenant.
    In a suit for specific performance by a saloonkeeper against his landlord, who, complainant averred, had received payment on the contract for the purchase of the leased premises in liquors obtained at the tenant’s bar, the contract being oral, held, that the tenant was entitled to relief, but only on payment of the purchase price, and that the bar bill amounted to no more than the interest on the principal.

    Appeal from Barry; Smith, J.
    Submitted January 5, 1912.
    (Docket No. 4.)
    Decided March 30, 1912.
    Bill by Charles Scheidt against Henry Roe, administrator of the estate of John E. Barry, deceased, and others, for the specific performance of a contract for the sale of land. From a decree for complainant, defendants appeal.
    Reversed, and decree entered for complainant on condition that he pay the purchase price.

      Frank A. Dean and Thomas Sullivan, for appellants.

      Colgrove & Potter, for appellee.

       Sufficiency of possession alone as ground, for granting specific performance of contract to convey real property, see note in 8 L. R. A. (N. S.) 870.

   Moore, C. J.

This is an appeal from a decree rendered in favor of the complainant and against all of the defendants upon a bill filed by the complainant against the defendant Henry Roe, administrator of the estate of John E. Barry, deceased, to restrain the prosecution of summary proceedings taken before a circuit court commissioner to recover the possession of the lands and premises situated in the village of Nashville, and described as the S. i of lot 19, of the village of Nashville, Barry county, Mich., and against the remainder of the defendants for specific performance of a parol contract, alleged to have been entered into by the complainant with John E. Barry in his lifetime, for the purchase of said premises, and for an accounting with all of the defendants, and for other and further relief.

Defendant interposed a plea in abatement of suit pending. This plea was overruled. The case was then heard upon pleadings and proofs. The trial judge filed a written opinion reading, in part, as follows:

“This case involves one of the most troublesome conditions in litigation which I have had for a long time. The complainant conducted his business with Mr. Barry in the most unbusinesslike way possible. Mr. Barry, whose estate is represented by the defendant Henry Roe, conducted his business with the complainant in the same manner. Mr. Barry’s lips are sealed by death, and complainant’s, on account of Barry’s death, are closed by the statute of the State as to the transaction between them.
“ Complainant, during all his dealings with Mr. Barry, was running a saloon. Mr. Barry was engaged in banking. The contention grows out of the leasing by complainant of a building from Barry for saloon purposes, and the patronage of Mr. Barry of the same saloon. It covers a period from and including the year 1892 to the date of Barry’s death in the spring of 1908. The business of the year 1892 is claimed to have been settled. Since that time, no settlement has been had between them. It is claimed that complainant, after the first year, was to pay rent for the building at $20 a month. It is probable this was the agreed price. Complainant claims that Mr. Barry did not pay his bar bill, and owed upwards of $3,100 at his death. He filed such a claim with the commissioners appointed to hear and adjust claims. The estate filed an offset for the rent, amounting to upwards of $4,500. Complainant nor the estate were represented by counsel, and no proof was taken. The matter was simply talked over, and the commissioners did the only thing they could do, which was a disallowance of both claims. Complainant, on the last day to take an appeal, consulted counsel, and his appeal was partially, or possibly fully, perfected. Not long after that, the administrator of the Barry estate commenced an action in the court to get possession of the building in which Scheidt was doing business. After that complainant stated to his counsel more in detail as to his business relations with Mr. Barry in which it was claimed by him that in September, 1904, he purchased the building of Mr. Barry, and was the owner of it. The bill in this case was filed to restrain the estate from proceeding in said cause, and for a specific performance of the contract of purchase and a general settlement of the affairs of complainant with said John E. Barry, and for general relief. To this bill, the estate interposed a plea in bar, claiming that complainant had elected his remedy by filing his claim with the commissioners and taking his appeal. This plea was overruled, after which an answer was filed and issue joined, and the case has been heard, and is now with the court for his determination.
“ I have no doubt of the purchase of the building by Mr. Scheidt, as he claims. Witnesses swear as to being present when the purchase was announced. There can be no question that Mr. Scheidt, although in possession as a tenant when the purchase was made, remained in possession, exercising acts of ownership which he would not have done, had he been a tenant. He made extensive repairs and improvements on the braiding. He leased it one year, at least, to another party. The proof is without doubt in my mind that the purchase was made, and that he is entitled to the relief he claims. The most difficult and troublesome question is the determination of whether he has paid the purchase price of $1,500 or not, and, if so, whether the estate owes him for any portion of the bar bill of Mr. Barry. There is but little doubt that he paid $50 at the time of the purchase; but further than that I think I can safely state that of all the cases I have heard this is the most barren of legal proof.
“ The complainant seeks to establish his claim for his bar bill by the introduction of a great many slips of paper, and fortifies them by the testimony of his two bartenders. It is doubtful if their testimony should be considered under the statute. 3 Comp. Laws, § 10212, as amended by Act No. 239, Laws of 1901. If considered, and should it be found that Mr. Barry owed all that is claimed, there is not a scrap of proof on the part of any one that Mr. Scheidt paid his rent; and, if he did not, it would offset, in a measure at least, the bar bill.
“In paragraph four of complainant’s bill, he alleges the refusal and neglect of Barry to pay for his purchases, and says ‘ that the same were charged to his account from day to day, and that the said John E. Barry was credited for his rent of said building at the rate of $20 a month.’
“It is most unsatisfactory to meto dispose of a case, feeling that anything I may do, or that may be done, may not have a safe foundation upon which to rest. I feel, however, that the case may be disposed of on probabilities growing out of some matters about which there cannot be any dispute.”

After stating his understanding of the testimony out of which the probabilities grew, he made a decree for specific performance, not allowing any balance due to either party from the other.

We have a record here of nearly 200 printed pages, not including a large number of exhibits which are returned but are not printed. The case was argued orally at length, and is well briefed. We agree with the trial judge about the litigation involving troublesome conditions. We also agree with him that an oral agreement was made for the purchase of the building; but we do not think it is established, even upon the doctrine of probabilities, by competent evidence, that complainant has so performed his part of the agreement by paying the purchase price as to entitle him to a decree for a conveyance.

It would profit no one to refer in detail to the testimony and to the many exhibits. An examination of the slips upon which complainant claims his account was kept at the times of the transactions satisfied us that the items upon these slips were not put there at the times they bear date. On the contrary, we are are satisfied from the appearance of the slips themselves that many of these exhibits were manufactured for the purposes of this case. We think there is a failure on the part of the complainant to show by a preponderance of proof such performance on his part as to entitle him to a decree for specific performance, except upon payment of the balance of the purchase price, which we find to be $1,450. As to the interest on the contract and the bar bill, we think there is a fair inference that one offset the other.

The decree of the court below is reversed, and one may be entered here in accordance with this opinion. The appellant will recover costs of both courts.

Steere, McAlvay, Brooke, Blair, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


author: Brooke, J.

text:
    PEOPLE v. TART.
    Intoxicating Liquors — Local Option — Principal and Agent— Furnishing Liquor — Statutes.
    One who takes money of another living in a county that has adoped prohibition, and in good faith purchases with it, in a county where intoxicating liquor may be lawfully sold, a bottle of whisky, which he delivers to the other in the county of his residence, does not violate 2 Comp. Laws, § 5412 et seq.

    Error to Oceana; Sessions, J., presiding.
    Submitted January 18, .1912,
    (Docket No. 151.)
    Decided March 30, 1912.
    Fred Tart was convicted of violating the local-option law.
    Reversed and respondent discharged.

      Franz G. Kuhn, Attorney General, and F. E. Wet-more, Prosecuting Attorney, for the people.

      Rufus F. Sheets, for respondent.

       Is one who obtains liquor for and delivers it to another, using the latter’s money, guilty of selling the same, see notes in 24 L. R. A. (N. S.) 268; 28 L. R. A. (N. S.) 334.

   Brooke, J.

The respondent was convicted of the vio-

lation of the local-option law. He has brought the case here by writ of error.

The charge in the information is that respondent, at the township of Golden, in Oceana county, did then and there sell, give away, and furnish to one William Mathews a certain quantity of malt, brewed, spirituous, and intoxicating liquors, to wit, one quart of whisky, etc., contrary to the provisions of section 5412, 2 Comp. Laws.

The judge charged the jury:

“ It is the claim of the people in this case that Mr. Tart and Mr. Mathews were employed upon the same farm in the township of Golden, in this county, at the time, and that Mr. Tart went to Muskegon on the 4th day of last July to spend the day; that prior to his going Mr. Mathews gave him $1 and requested him to purchase a dollar’s worth of whisky for him in Muskegon and bring it back to him. It is the claim of the people that Mr. Tart took Mr. Mathews’ money and purchased a quart of whisky in Muskegon county, and upon his return on the evening of the 4th day of July delivered that quart bottle of whisky to Mr. Mathews; and it is the claim of the people that that constitutes a violation of the local-option law, so called, which, it is conceded, was in force in this county at that time. As a matter of law, gentlemen, you are instructed that if Mr. Tart took Mr. Mathews’ money and, acting for him, purchased a quart of whisky in the county of Muskegon and brought it to Mr. Mathews and delivered it to him in this county, such an act constituted a furnishing of intoxicating liquor within the law, and, if you find that to be the fact, it will be your duty to convict this respondent and find him guilty. One matter has been called to my attention, gentlemen. The place where the liquor was purchased by Mr. Tart is of no materiality. The erucial question is whether or not he delivered the liquor, under the circumstances, within this county to Mr. Mathews. It wouldn’t make any difference whether he bought it in Muskegon county or somewhere else, so far as that part of it is concerned. You may retire, gentlemen. ”

The foregoing excerpt from the charge perhaps sufficiently indicates the character of the act which the court held to be a violation of law. It should, however, be noted that respondent, who was about to go to Muskegon, was asked by Mathews as an accommodation to him to take $1 of his money and purchase a bottle of whisky for him in Muskegon, and bring it back to him in Oceana county. Respondent had no interest in any portion of the liquor purchased for Mathews with the money given him by Mathews for that purpose

The question presented is a very simple one. Is an agent, who takes the money of one living in a “local-option” county, and with it purchases liquor in a county where it may be legally sold, which he delivers to his principal in the “local-option” county, guilty of any offense under the so-called “ local-option ” law ? It is clear that Mathews himself might have gone to Muskegon, bought his bottle of whisky, and carried it back into Oceana county. It is equally clear that a resident of a “ local-option ” county may order and pay for intoxicating liquors outside his own county and have them shipped to him by express or otherwise. People v. Converse, 157 Mich. 32 (121 N. W. 475).

The act of respondent in this case cannot be distinguished upon principle from that of a common carrier. He neither gave, sold, nor furnished the liquor in Oceana county within the meaning of the act. This case is to be distinguished from the case of People v. Curry, 163 Mich. 181 (128 N. W. 213, 30 L. R. A. [N. S.] 892), where the intoxicating liquor was purchased in bulk from a contributed fund, each contributor drinking as much and as often as he chose from the common stock. Here Mathews had an individual and exclusive property in the bottle of whisky which his money had paid for and which was delivered to him. Had there been any question, under the testimony, of the good faith of respondent in performing the act of agency with no interest in the transaction except to accommodate Mathews, that question should have been submitted to the jury under our former decisions. See People v. Hancock, 166 Mich. 654 (132 N. W. 443). A verdict of acquittal should have been directed as requested by respondent.

The judgment is reversed, and respondent discharged.

Moore, C. J;, and Steere, MoAlvay, Blair, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


text:
    ZAGELMEYER v. LAUGHRAY CONCRETE BRICK CO.
    1. Contracts — Patents—Inventions — Specific Performance — Assignments.
    In a suit for the specific enforcement of a contract to assign to a corporation, which the parties were engaged ..n promoting, any improvements and inventions the parties might thereafter make in brickmaking machines or in concrete for making brick, a decree requiring the assignment to the company of a subsequently acquired patent of an invention .discovered by the promissors in the contract, relating to the subject-matter of their original patent, was within the rule permitting such contracts to be enforced when the subject-matter of the inventions is described and made definite.

    2. Insolvency — Patents—Corporations—Creditors’ Rights.
    The president of the corporation, having no lien upon any of its assets, was not entitled to a preference over other creditors of the corporation out of the proceeds of the sale of suoh patent under the order of the court after the insolvency of the company.
    Appeal from Bay; Collins, J.
    Submitted April 6, 1911.
    (Docket No. 32.)
    Decided November 3, 1911.
    Rehearing denied June 1, 1912.

      Bill by Alexander Zagelmeyer against the Laughray Concrete Brick Machine Company, Robert Laughray, G. Frederick Laughray, and Edward Laughray, for specific performance of a contract to convey certain patents. From a decree for complainant, defendants appeal.
    Modified and affirmed.

      Lee E. Jo sly n, for complainant.

      Brakie J. Orr, for defendants.

       Agreement to assign future inventions on sale of patent, see note in 2 L. R. A. (N. S.) 1094.

   Bird, J.

The prayer of the bill of complaint in this cause prayed for the specific performance of a contract made by the complainant with the defendants Laughray. The relief prayed for was granted by the trial court, and the defendants Laughray have appealed.

The defendant corporation, a domestic one, was organized in April, 1906, the principal object of which was the manufacturing and selling of brick and brick machinery. The complainant and defendants Laughray were the incorporators and stockholders. For upwards of two years prior to the incorporation of the company, the complainant and defendants worked together under a copartnership agreement, the complainant furnishing the money and the defendants the inventive genius in an effort to perfect an improved machine for making brick. Just prior to the incorporation of the company, but while it was in contemplation, the parties made a contract, the material portions of which are as follows:

“ Witnesseth, that whereas the parties hereto are about organizing a corporation under the laws of Michigan, under the name of Laughray Concrete Brick Machine Company, with a paid in capital stock of $25,000.00, of which each of the parties hereto subscribes for and owns 625 shares of the par value of $10.00 a share, and whereas as part of the capital stock there will be assigned to the corporation the Laughray patents, United States No. 747,443, dated Dec. 22, 1903, Canadian No. 92,237, dated Mch. 21, 1905, and pending application for patent in the United States patent office: Now, therefore, in consideration of the premises and of one dollar by each to the other in hand interchangeably paid, it is hereby covenanted and agreed by and between the parties hereto as follows, viz.:
“ (1) That each of the parties hereto will assign to said corporation any improvements or inventions he has or hereafter may make in brick-making machines, or in concrete for making brick and blocks.
“ (2) That the corporation will, out of the first money it shall receive, pay to Alexander Zagelmeyer certain advances made by him amounting to $4,000.00 or thereabouts, which will adjust the accounts between the parties hereto.”

This contract was ratified by the stockholders of the corporation at its first meeting. Patent No. 747,443 was assigned to the company in accordance with the agreement, but the application for a patent was never signed, and subsequently was withdrawn. The parties worked in harmony for a time, and complainant advanced more money to meet the needs of the business. It was later demonstrated that the patent which had been assigned to the company was of little value. After this, the defendants appeared to lose their interest in the enterprise, and gave little attention to its affairs. Complainant refused to advance any more money to the company. Machinery which had been purchased was turned back to the vendors, and other assets of the company were levied upon and sold by creditors. The company became insolvent. In August, 1907, another patent, No. 862,259, was issued to R. E. and Gt. E. Laughray on a machine for making cement brick. It was insisted by complainant that this patent should be assigned to the company, but the defendants refused to assign it, and this suit was begun to enforce it. After a hearing, the trial court held that the patent was embraced within the terms of the contract, and ordered defendants to assign it to the company. A receiver was appointed, and he was ordered to sell the patent at public sale, and the decree provided that the proceeds should be distributed as follows:

“ (a) He shall first pay the costs and expenses of such sale, including his fees thereon.
“ (6) He shall pay to Alexander Zagelmeyer, or his solicitor, the costs and expenses of this suit, to be taxed.
“ (c) He shall pay to Alexander Zagelmeyer, or his solicitor, four thousand dollars ($4,000.00), if there be sufficient to pay the same.
6! (d) The balance of the moneys arising from said sale, if any there be, shall be paid to the register of this court, subject to the further order and decree of the court herein.”

The defendants attack the decree on the following grounds:

(1) Complainant does not come into court with clean hands.
“(2) The decree is not in accordance with law and equity, and, instead of following the law, departs from and is contrary to it.
“(8) Because of the inequitable and tortious conduct and actions of complainant, he is not entitled to equity. ‘ He who seeks equity must do equity.’
“ (4) The conduct and action of complainant, even though not intended as such, tended to and did work a fraud upon defendants, and such can never be the foundation of an equitable right.
“ (5) Complainant could not proceed in this cause, until he has first obtained judgment or decree, execution issued thereupon, and returned unsatisfied, as a foundation therefor.
“(6) The patent which complainant claims was the subject of the contract, Exhibit A, not being discovered or the discovery contemplated at the time of the execution of the contract, and not being related to the patents assigned, as an improvement or otherwise, could not be the subject of the contract; that is to say, having no existence, potential, or otherwise, there could be no contract relative to it.
“(7) The defendants, nor any or either thereof, never had or received or retained any benefit of or from the machinery, etc., for which complainant now makes claim, nor have they or any or either such machinery or any part thereof, nor did they or any or either ever dispose of the same or part thereof, or give consent thereto.
"(8) The patent, afterwards discovered, having no relation to the one assigned, was not, nor could it be, the subject of the contract.”

Objections 1, 3, 4, and 7 relate to questions of fact passed upon by the trial court. Defendant’s counsel makes many charges of bad faith on the part of complainant based on his cross-examination. A careful reading of complainant’s testimony convinces us that he entered into the business in good faith, •put his money into it to an amount in excess of $4,000, and worked for the general welfare of the company as long as the defendants cooperated with him. Later, when it became evident that the project was a failure, the complainant did not give the attention to the corporate business which his position as president demanded of him, but the defendants were officers also, and they were less attentive than complainant, and are in no position to complain of complainant in that regard. We think the trial court reached the right conclusion on the questions of fact.

Objections 6 and 8 raise the question that the contract to assign to the corporation future patents and improvements was void, and not enforceable. It has been held that an agreement to assign all future inventions was not enforceable (30 Oye. p. 945), but an agreement to assign future patents is enforceable if the subject-matter of the inventions is described and made definite (Id. p. 944).

In one of the reported cases where the agreement to assign was general, the contract was held enforceable as to patents which related to the particular business in which the parties were engaged. Bates Machine Co. v. Bates, 192 Ill. 138 (61 N. E. 518). The contract under consideration was definite and was restricted to inventions or improvements relating to brick-making machinery. This would clearly bring it within the rule which permits such contracts to be enforced.

We are of the opinion that the trial court reached a right conclusion, and that the decree should be affirmed save as to that part which provides:

“(c) He shall pay to Alexander Zagelmeyer, or his solicitor, four thousand dollars, if there be sufficient to pay the same.”

The complainant was a creditor, but he had no lien on the patent, nor would he have on the proceeds of it. He had no preference which other creditors of the company were bound to respect. As the record discloses that there are other creditors, they should be given an opportunity to intervene and participate in the fund as their respective rights may appear.

The decree will be modified in this respect and affirmed. The complainant will recover his costs in this court.

Ostrander, O. J., and Moore, McAlvay, and Brooke, JJ., concurred.