text:
    SPRATLER v. SPRATLER.
    1. Divorce — Aiimoky—Dower—Statutes.
    The provisions of Act No. 259, Pub. Acts 1909 (3 Comp. Laws 1915, § 11436 et seq.), providing that whenever any decree of divorce is granted it shall be the duty of the court to include in it a provision in lieu of the wife’s dower, being inconsistent with section 11415, 3 Comp. Laws 1915, providing that, when a divorce is decreed in certain cases, the wife shall be entitled to dower in the lands of the husband, held, that the latter statute is repealed by implication. Ostrander, C. J., and Moore, J., dissenting.
    2. Same.
    ' Where, in divorce proceedings, the evidence shows that, at the time of the marriage, defendant husband was 60 years of age and the wife 24, that they lived together about four and one-half years, during which time defendant’s fortune was not materially increased by plaintiff’s efforts, that the fair, value of his real property was $30,000, and his personal $5,642, exclusive of household goods, an award to plaintiff of $5,000 ’’in lieu of dower, household furniture of the value of $846, and taxable costs including an attorney fee of $350, will not be disturbed on appeal, as either unfair or inadequate, although defendant was guilty of extreme cruelty and adultery.
    See note in 44 L. R. A. (N. S.) 998.
    Appeal from Kent; Perkins, J.
    Submitted June 6, 1918.
    (Docket No. 41.)
    Decided December 27, 1918.
    Bill by Lida Spratler against Joseph Spratler for a divorce. From a decree for plaintiff respecting alimony, she appeals.
    Affirmed.

      Don E. Minor, for plaintiff.

      H. Monroe Dunham, for defendant.
   Bird, J.

Plaintiff filed her bill praying for a decree of divorce from defendant on the grounds of extreme cruelty and adultery. Upon the hearing of the cause the chancellor was persuaded that defendant was guilty of both charges and accordingly granted plaintiff relief, announcing at the time that he would hear the parties later on the question of alimony. Subsequently the matter was taken up and testimony offered bearing upon the value of defendant’s property, which was largely real estate, situate in the city of Grand Rapids. The .conclusion reached by him was that a fair value of the real estate was $30,000, and the personal property $5,642, exclusive of household goods. Upon this valuation the chancellor awarded plaintiff $5,000 in lieu of dower, household furniture of the value of $846, and taxable costs including an attorney fee of $350. Plaintiff was dissatisfied with this award and has appealed to this court.

Plaintiff makes the point that defendant having been found guilty of the charges of misconduct and adultery, she is entitled to dower under the following statute:

. “When the marriage shall be dissolved by the husband being sentenced to imprisonment for life, and when a divorce shall be decreed for the cause of adultery committed by the husband, or for the misconduct, or habitual drunkenness of the husband, or on account of his being sentenced to imprisonment for a term of three years or more, the wife shall be entitled to her dower in his lands in the same manner as if he were dead; but she shall not be entitled to dower in any other case of divorce.” 3 Comp. Laws 1915, § 11415.

Defendant denies that the foregoing statute is applicable to the present situation by reason of the passage of Act No. 259, Pub. Acts 1909 (3 Comp. Laws 1915, § 11436 et seq.), the material portion of which reads:

“When any decree of divorce is hereafter granted in any of the courts of this State, it shall be the duty of the court granting, such decree to include in it a provision in lieu of the dower of the wife in the property of the husband, and such provision shall be in full satisfaction of all claims that the wife may have in any property which the husband owns, or may thereafter own, or in which he may have any interest.”

The question therefore presented for our consideration is, to what extent section 11415 was affected by the passage of Act No. 259.

Both of these statutory provisions deal with the same subject-matter. Act No. 259 makes no reference to the former one. In section 11415 the legislature itself fixes the alimony which a wife shall be entitled to, if granted a decree of divorce on the ground of misconduct or adultery. Act No. 259 confers upon chancery courts in all cases the power to fix a provision in lieu of dower. It is quite apparent that these provisions are conflicting and are therefore repugnant. The only way, which occurs to us, that they could be construed so that both might stand would be to say that Act No. 259 confers upon chancery courts the power to fix the value of the alimony which the legislature has granted. Prior to the passage of Act No. 259 a decree of divorce rendered on the ground of misconduct or adultery invariably led to another proceeding before the wife could secure the possession of her alimony. This complicated and delayed such proceedings. Another difficulty frequently met with by chancery courts in determining the question of alimony was the ownership of property by the entireties. The court lacking adequate power to deal with these tenures made property adjustments difficult. A consideration of Act No. 259 in connection with the practice prior to its passage leads to the conclusion that this legislation was passed to meet these difficulties and to confer upon chancery courts the power to dispose of the questions of divorce and alimony in one proceeding. While this court has never had occasion to pass directly on this question its attitude in disposing of alimony questions since the passage of Act No. 259 has been consistent with this construction. Our conclusion is that section 11415 was repealed by implication by the passage of section 1 of Act No. 259, Pub. Acts 1909.

But plaintiff argues that if this be the proper view the allowance was inadequate, considering the value of defendant’s property. When all the circumstances are considered, the award which was made does not appear to be unfair or inadequate. At the time of marriage defendant was 60 years of age and plaintiff 24. They lived together about four and one-half years. The testimony indicates that plaintiff was industrious and a good housewife, and besides was helpful to defendant in his work as an undertaker, but it does not appear that defendant’s fortune was increased to any considerable extent by her efforts during the time they lived together. The valuation placed upon the property by the court was a fair one and we think neither the valuation of the property nor the award of alimony should be disturbed.

The amount paid by defendant, under the order of this court, for plaintiff’s weekly allowance and counsel fees will be credited on the decree for permanent alimony. The conclusion reached by the trial court will be affirmed. No costs in this court will be allowed either party.

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

Ostrander, C. J. In my opinion the act of 1909 did not repeal section 11415, 3 Comp. Laws 1915. The two statutes must be read together. I agree to the affirmance of the decree.

Moore, J., concurred with Ostrander, C. J.


source: Caselaw Access Project

author: Bird, J.

license: Public Domain

text:
    WOOLFITT v. PRESTON.
    1. Wills — Life Estates — Limited Power of Disposal.
    Under a provision of decedent’s will bequeathing to her oldest daughter the homestead, including furnishings and piano, with authority to use or sell it if it seems best to • do so, using the principal for her own and children’s support, if necessary, and at her death the property, or what remains of it, to be equally divided between two other daughters, and at their death, if the property still remains intact, to be divided between two grandchildren, the oldest daughter took a life estate with power to sell if she deems best, and the further right to use such part of the proceeds as is necessary in the support of herself and children, but for no other purpose; the other daughters took a life estate subject to the above provisions; and the two grandchildren took a vested interest in the remainder.
    2. Same — Executors and Administrators — Bonds.
    Where the mother did not impose any terms of security upon the oldest daughter,- none will be required by the court unless she exceeds the limits of good faith in the administration of the fund.
    3. Same — Life Estates — Suspending Power of Alienation — Two Lives in Being.
    The contention that said provision of the will attempts to suspend the power of alienation for a longer period than during the continuance of two lives in being (3 Comp. Laws 1915, §§ 11532, 11533), cannot be sustained, since the devise to the two younger daughters is that of one life estate devised to both, to be enjoyed by then! in common.
    Appeal from Genesee; Stevens, J.
    Submitted June 4. 1918.
    (Docket No. 23.)
    Decided December 27, 1918.
    Bill by Martha B. Woolfitt and another against Claudia M. Preston and others to construe the last will of Augusta N. Bannister, deceased. From a decree for plaintiffs, defendants appeal.
    Affirmed.

      George W. Cook, for plaintiffs.

      Carton, Roberts & Stewart, for defendants.
   Bird, J.

Augusta N. Bannister, a resident of Flint, died testate in October, 1915, leaving three daughters, Claudia, Martha, and Florence. Her will was admitted to probate without contest. It contains the following provision:

“I give, devise and bequeath to my oldest daughter, Claudia, what is known as the old homestead, situated on Harrison street between Second and Third streets, No. 615. I will to Claudia this home and furnishings, including piano. Claudia to have entire control of this property during her lifetime; rent the property and collect the rents as she desires. If there is good opportunity to sell this property and it seems best to sell it, she may do so, using the interest on same. If necessary to use principal for herself and children’s support, she may do so. The interest from this property to be used as far as possible for her own support and children’s education. At Claudia’s death, I wish this property, or what .is remaining of it, to be equally divided between Martha and Florence. If the property still remains intact at their death, I wish it to be divided between my granddaughters, Helen and Ruth Preston. If there are other grandchildren, all are to share alike. * * * If Martha and Florence are not both living at Claudia’s death, then the one who is living shall have possession of the Harrison street property. If both are not living, then the property will go to my grandchildren and be divided equally between them.”

The daughters being unable to agree among themselves as to the construction which should be given to this paragraph of the will, Martha and Florence filed this bill to obtain a judicial construction thereof. Martha and Florence contend that Claudia has only á life estate in the premises with a limited power of disposal. Claudia claims that the devise gives her an estate in fee,'for reasons which we shall presently consider.

Counsel for Claudia contend that the language of the devise brings the cause within the holdings of Jones v. Jones, 25 Mich. 401; Dills v. Latour, 136 Mich. 243; Moran v. Moran, 143 Mich. 322 (5 L. R. A. [N. S.] 323, 114 Am. St. Rep. 648); Killefer v. Bassett, 146 Mich. 1; White v. Railway Co., 190 Mich. 1; while counsel for Martha and Florence insist that the case comes within the construction of Jones v. Deming, 91 Mich. 481; Gadd v. Stoner, 113 Mich. 689; Farlin v. Sanborn, 161 Mich. 615 (137 Amt. St. Rep. 525); In re Moor’s Estate, 163 Mich. 353; Bateman v. Case, 170 Mich. 617.

The test suggested by Gadd v. Stoner, supra, which has been followed by some of the cases, is “whether the will gives an unlimited, or only a modified power of disposition in the first taker.” The power of disposition contained in this devise does not appear to be an unlimited one. It does not give Claudia permission to sell the premises and dispose of the proceeds for any purpose she may choose. It does authorize her to make a sale thereof if she deems best and a favorable opportunity offers, but it limits the expenditure of the proceeds to her and her children’s necessities. To expend the proceeds for any other purpose would be a clear violation of the express terms of the devise. The testatrix makes her intent very clear that the proceeds of the premises, if sold, shall be devoted to the care and support of Claudia and her children. This conclusion brings the case within the holding of Gadd v. Stoner, and kindred cases heretofore cited. Our conclusion is that Claudia takes a life estate in the premises with the power to sell them if she deems best, and the further right to use such part of the proceeds as is necessary in the support of herself and children, but for no other purpose. Subject to these provisions Martha and Florence take a life estate and Helen and Ruth Preston a vested interest in the remainder.

Counsel suggest if this conclusion be reached and a sale should' be made Claudia should be required to give a bond to protect the proceeds against unauthorized expenditure. The fact must not be overlooked that this property belonged to the mother, and that she had a right to do with it as she pleased. She has seen fit to give it to Claudia under these conditions without imposing any terms of security, and none will be imposed unless she exceeds the limits of good faith in the administration of the fund. 18 Cyc. p. 614; Gadd v. Stoner, supra; Chamberlain v. Husel, 178 Mich. 1.

A further reason suggested why the devise should be construed to be a fee in Claudia is that the testatrix has attempted by this provision of her will to suspend the power of alienation for a longer period than during the continuance of two lives in being at the creation of the estate, which is prohibited by our statutes. See sections 11532, 11533, 3 Comp. Laws 1915.

To bring the devise within these sections counsel reason in this wise:

_ “First, Claudia is given a life estate; Martha is given a life estate, and Florence is given a life estate, and remainder over to Helen and Ruth Preston, and other grandchildren, if any.”

We think counsels’ reasoning is erroneous in assuming that the estate given to Martha and Florence represents two life estates instead of one. A fair interpretation of the language of the devise is that one life estate is devised to both Martha and Florence, to be enjoyed by them in common. In other words, an undivided one-half to each. The language of the tes-

tatrix is: “At Claudia’s death, I wish this property, or what is remaining of it, to be equally divided between Martha and Florence.” By no reasonable construction could this be construed as giving whatever remains to Martha as long as she lives and afterwards to Florence during her life. We are of the opinion that this point is not well taken.

The conclusions which we have reached upon these questions are the same as were reached by the chancellor, therefore, the decree of the lower court will be affirmed. Plaintiffs will recover their costs in this court.

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


author: Steere, J.

text:
    MARCOUX v. REARDON.
    1. Corporations — Winding Up — Sale op Corporate Assets.
    While the statutory method of -appointing a receiver for winding up the affairs of a corporation when in failing condition would he more regular and apparently the wiser course in case of an objecting stockholder, the statute does not make unlawful, other methods taken by authority of the majority, where all have equal opportunities to purchase the stock of others or assets of the corporation at public or private sale.
    2. Same — Majority Control.
    In corporations organized for business purposes and for the private gain of their members, the principle of the rule of the majority obtains to the extent that if the majority conclude that the business cannot be carried on with profit or advantage to all, they may, against the will of the minority, elect to wind it up.

      3. Same — Fraud—Accounting—Pleading—Amendment—Equity.
    On a bill by a stockholder in an elevator corporation for the value of his stock, alleging fraud by other stockholders in the sale of its property and assets for the purpose of paying its debts, pursuant to a vote by a majority of the stockholders, defendants were not equitably entitled to an amendment of the bill allowing the corporation to be made a party plaintiff, and then allowing one of the defendants to amend his answer by adding a cross-bill for the purpose of quieting his title to said property, which neither the corporation nor plaintiff had questioned, and the decree of the court below dismissing plaintiff’s bill and quieting defendant’s title will be modi fled on appeal and limited to dismissal of the bill, plaintiff having failed to establish his right to recover under the allegations in his bill.
    Appeal from Bay; Davis, J., presiding.
    Submitted June 5, 1918.
    (Docket No. 30.)
    Decided December 27, 1918.
    Bill by Charles Marcoux against William Reardon and others for an accounting for the conversion of certain shares of corporate stock. From a decree for defendants, plaintiff appeals.
    Modified, and affirmed.
    Kinnane, Black & Leibrand, for plaintiff.

      W. E. Reardon, for defendant Reardon.

      Gilbert W. Hand, for other defendants.
   Steere, J.

Plaintiff and defendants were stockholders in a corporation known as the Farmers’ Elevator Company, of Pinconning, Michigan, organized and incorporated under the laws of this State in July, 1911, with an authorized capitalization of $12,000. It was in its inception a local promotion by certain citizens of Pinconning and vicinity, optimistically inaugurated with a view to building a large elevator at Pinconning as headquarters and acquiring control of the business in that vicinity and adjacent points, where it was proposed to establish small elevators, or buying stations called “scoopers.” Its first activity was the exhaustion of its capital in construction of an elevator, at Pinconning village, which commenced doing business in October,- 1911. A report of the condition for the year ending December 31, 1911, showed $12,000 capital stock subscribed and paid in, $11,000 cash and $1,000 property, and indebtedness $8,000. Of its assets to balance this, $14,198.76 consisted of “real estate including full equipment of elevator to date.” In 1913 the capital stock was increased, and proceeds from sale of stock devoted to enlarging and improving the plant by an addition to the bean department more than doubling its capacity.

There was an elevator at Pinconning in active operation when this gompany was organized, which had capacity to handle the naturally tributary business of the village and proved an active competitor. The project to develop feeders for the company’s elevator by organizing buying stations and building small elevators at surrounding towns and stations to control the larger territory did not materialize. With all its capital invested in a plant, the company borrowed money from the beginning with which to run its business. It obtained loans from banks in Pinconning, Saginaw and Detroit, secured by indorsements of defendants and plaintiff. Whether it at any time during its career was run at a profit is a matter in dispute. In the fall of 1915, its outstanding stock amounted to $25,300, its plant had cost over $25,000 and its indebtedness amounted to approximately $16,-000, about $15,000 being bank paper upon which payment was urged. That the company was involved in debt and its financial condition a subject of solicitous discussion, particularly with defendants and plaintiff who were the principal stockholders and indorsers of its paper, is undisputed.

A stockholders’ meeting was called on request of the requisite number of stockholders, including plaintiff, to meet on November 2, 1915. The purpose of such meeting, as stated in the notice to stockholders, being as follows:

■ — “taking action to relieve certain of the stockholders of said corporation from their personal liability of said corporation. It is the opinion of the officers and directors of said corporation that the only way in which the debts of the corporation can be paid will be by the sale of the property. You are hereby notified that this meeting is called for the purpose of taking such corporate action as may be necessary to dispose of and sell the property of said corporation, in order to pay its debts.”

A meeting was held pursuant to notice, on November 2, 1915, at which 15 stockholders were present representing $22,060 of the capital stock. The record of that meeting shows that after it was called to order by the president and the notice stating its purpose read, free discussion was invited and several projects to relieve the situation were proposed and discussed. Amongst other things the record contains the following:

“Mr. Reardon and Mr. Naumes also stated that the persons individually liable for the debts of the corporation held more than 80% of the stock and that they were willing to enter into any arrangement to continue the businqss<;of said corporation whereby they would be relieved from their personal liability for the debts. Mr. Reardon, Mr. John Klumpp, Mr. Fred. Klumpp and Mr. Naumes and Mr. Charles Marcoux, each offered to surrender their stock without cost if they could be relieved from their liability on the notes.”

Plaintiff does not deny the correctness of this record as to his making such offer, which is sustained by other witnesses, but says:

“I might have said it myself for all I know, but it was simply a general discussion among the large body of men.”

During that discussion Mr. G. C. Leibrand, who represented 50 shares of stock, after suggesting a receiver, further suggested the propriety of auditing the books of the company to determine how the losses had arisen, but on a motion that he be made chairman of a committee for that purpose declined to act on such committee and that subject was not pursued further.

After full discussion the following resolution was finally adopted:

“Whereas, the said Farmers’ Elevator Company, a corporation, is largely in debt, with no money with which to pay the same, therefore be it—
“Resolved, that the property of said corporation, including all real and personal property of whatsoever nature, be conveyed to William Reardon, as trustee, to sell and dispose of same to pay the debts of said corporation, said debts amounting to $14,775.00, hereby authorizing said trustee to dispose of and sell said property for a sum to pay said debts or any amount in excess of same. Be it further—
“Resolved, that the officers of said corporation are hereby authorized and empowered to make, execute and deliver to said William Reardon, as trustee, prop-' er conveyances to carry out the purpose of this resolution.”

' Of the 15 stockholders voting the recorded vote of members and • shares shows, voting “yes”: George Barie 60, Charles Bock 10, William' Fleis 5, Gilbert W. Hand 1, F. W. Klumpp 400, J. C. Klumpp 270, V. B. Klumpp 155, E. H. Klumpp 120, Charles Marcoux 451, E. C. Marcoux 68, Martin Naumes 81, William Reardon 515, making 2,136 shares, of $21,360 par value; while G. C. Leibrand voted 50 shares and two other stockholders 10 shares each, total number of shares 70, par value $700, against the resolution.

On the same day, November 2, 1915, the following agreement was signed by the parties to this suit:

“Pinconning, Mich., November 2, 1915.
“We, the undersigned, for and in consideration of the mutual promise to pay the sum of $500 by each of the undersigned, for the purpose of forming the initial capital for the organization of a new corporation to take over the assets of the Farmers’ Elevator Company and pay the debts of the Farmers’ Elevator Company, do hereby severally subscribe and agree to pay the sum of $500 to William Reardon, as trustee for the purposes above set forth, on or before .... days from the date hereof, all on condition and with the promise that said Farmers’ Elevator Company take proper and necessary corporate action, conveying the assets of said Farmers’ Elevator Company to said William Reardon, trustee.
“Martin Naumes,
“William Reardon,
“John G. Klumpp,
“Charles Marcoux,
“Fred. H. Klumpp,
“EDward H. Klumpp,
“George Barie,
“Val B. Klumpp.”

The property was conveyed to Reardon as trustee pursuant to the resolution adopted at the stockholders’ meeting and efforts were made by h|m to sell the same to various outside parties interested in the elevator' business without success and he then tried to sell it by auction. Notice of a public sale to the highest bidder was advertised in the Bay City Times-Press, which had a circulation of from eight to ten thousand copies, and the property was offered at public sale at the time and place noticed, but no buyers appeared, nor were bids made except by Mr. Hand, the attorney for the company since its organization, who there stated he was bidding the property in for the eight men who signed the $500 agreement of November 2, 1915. It was struck off to him for the amount of the indebtedness, but he paid no money upon his bid and nothing was done to relieve the situation. Reardon was unable to get any co-operation for financing the project under the agreement by the indorsers of November 2, 1915, or find a purchaser for the property who would pay more for it than the indebtedness, as he testified, and he finally negotiated a sale to Fred. W. Klumpp for $15,845.44, the full amount of the company’s indebtedness, and the following paper was signed by defendants:

“November 28, 1915.
“In consideration of the assumption and payment of the debts in full of the above company, whereby the undersigned are relieved from all liabilities on the indorsements and obligations of said company, and fully understanding that Fred. W. Klumpp is the party who has advanced the necessary money to pay the said debts, and relieved the undersigned from liability as aforesaid, particularly hereby referring to those persons who are liable on said indorsements, we hereby waive any and all rights growing out of the foregoing writing, as the result of which William Reardon, trustee, on November 16, 1915, conveyed all the property of said company to Gilbert W. Hand, attorney for said above named parties, hereby authorizing William Reardon, as trustee, to execute and deliver the necessary instruments to convey said property to *Fred. W. Klumpp, or any person that he may name, all subject to the agreements and obligations, whereby said Fred. W. Klumpp advances the necessary money to pay the debts of said company.
“In witness whereof the said parties before above named have hereunto subscribed their names for the purposes and intents herein set forth.
“Martin Naumes,
“William Reardon,
“Fred. W. Klump,
“Val B. Klumpp,
“George Barie,
“John G. Klumpp,
“Edward H. Klumpp.”

Plaintiff refused to join with defendants in the execution of this instrument at a meeting to which he was invited for that purpose, leaving to seek other counsel after some heated discussion and after an undiplomatic demonstration against him by the attorney for the company because of his declining to co-operate.

Acting as trustee under the resolution adopted at the stockholders’ meeting of. November 2, 1915, and the consent of all indorsers of the company’s paper except plaintiff, Reardon transferred the property to Val B. Klumpp' by direction of his father Fred. W. Klumpp, who paid to Reardon $15,845.44 in cash for the same. The money was thereupon put in the Pin-conning bank to the latter’s credit and he drew checks to that amount with which he paid all indebtedness of the Farmers’ Elevator Company in full, receiving no compensation for his services as trustee in the proceeding.

Fred. Klumpp testified that he then offered plaintiff an interest in the property “half or more if he wanted it,” and told Mr. Hand to write him. Hand wrote plaintiff, on November 27, 1915, reviewing the situation and claimed conditions which necessitated and justified the sale, stating that Fred. Klumpp was perfectly willing to have plaintiff go in with him if he desired to, and he could take on the same basis of cost a half, or a quarter, or an eighth interest in the investment. Of this plaintiff said:

“I would not go in that way. I wanted a controlling interest or none at all after the kind of a deal they were giving me.”

When the resolution of November 2, 1915, was adopted authorizing Reardon to sell the property as trustee plaintiff owned 451 shares of stock in the company and his son Ezra 68, which they voted in favor of said resolution. He filed this bill of complaint, on July 22, 1916. In it he states that he has acquired by assignment his son’s stock, 100 shares previously belonging to Rev. Entrope Langlais and 50 shares from G. C. Leibrand, who appears as one of his attorneys in the suit, “with all the rights and equities arising out of the ownership of such stock and the conversion thereof,” doing so .“to avoid multiplicity of suits and to determine and dispose of the rights of said Langlais and Leibrand, together with your orator, in one action”; thereby representing 669 of the 2,530 shares of stock issued by said company.

The substance of his grievances as set out in his bill with detail of facts as he claims them is that he was misled and deceived by “misrepresentations which were made to him by defendants, and from statutory reports of the financial condition of the company and the reports made at meetings of the stockholders and directors of the condition of the company” and was by them “induced from time to time to subscribe for more of the company’s stock in order that money might be procured for the purpose of enlarging and improving the elevator company’s plant and adding new machinery”; that he relied upon such representations and believed the financial condition of the company was good until shortly before November 2, 1915, when he received notice from the secretary of a meeting to be held on that date “for the purpose of selling the elevator and all of its property to pay its indebtedness,” and was about that time informed by defendants that the company was in bad straits financially and heavily indebted, for which reason it was necessary in order to continue the business “to form a new company which would take over the assets of the old, company and which would make it necessary for the stockholders to put into the business about $500 each of ready cash to put the business again upon its feet”; and believing the representations made by defendants as to the bad financial condition of the company he signed the agreement of November 2d relative to a new organization; that by various false representations and claims of emergency by defendants at the stockholders’ meeting of that date the resolution authorizing a trustee sale prevailed; that he fully relied upon the promises of defendants that the proposed reorganization of the company would be carried out and offered to pay over the $500 “being his share of the proposed reorganization,” and after waiting some time endeavored to find out the cause of delay, but defendants represented they knew nothing about the matter, until on November 26, 1915, he was called to Pinconning “to attend to matters in connection with the elevator company’s business,” which he supposed was to carry out the reorganization, when he first learned it had been abandoned and he was requested to sign the paper of that date authorizing sale of the plant to Fred. Klumpp for sufficient to pay the company’s debts, which he protested against and refused to ratify,—

“but nevertheless said defendants conveyed and caused said property to be conveyed to Val B. Klumpp mentioned in the paper aforesaid, thereby finally absorbing and disposing of all of the assets of said corporation, and that they thereby converted the stock of your orator and that recently assigned to him by Father Langlais and G. C..Leibrand, and have appropriated the same to their own use. That said defendants are now in control of said elevator and property and are operating the same and that they have placed the title thereon in the name of Val B. Klumpp in trust for said defendants.”

He further alleges that the property of the company was worth much more than represented by defendants, or the amount of indebtedness for which it was sold; that defendants fraudulently conspired together to and, by the course pursued, did in effect and fact deprive him and those he represents of their stock; and thus converted the same to their own use. The relief asked is for an accounting, an injunction and a decree against defendants for the value of the stock so converted by them with a first lien for the amount decreed on the “property and real estate” of the company as described in the bill.

Defendants by their answers make denial of all wrong-doing charged, traverse the various allegations of plaintiff’s bill in detail with their versions of transactions mentioned, allege that plaintiff was actively connected with the company as a director throughout its career, was conversant with and as a director participated in its general management and the things of which he now complains, except the final sale, was familiar with its financial embarrassment and with defendants became an indorser liable for its indebtedness, had offered his stock to any one who would relieve him of liability, as did defendants, and voted for the resolution authorizing a trustee’s sale for sufficient to pay the indebtedness and release them; that none of the defendants have any interest whatever in the property sold, or former assets of the company, except Fred. Klumpp and his son, to whom it was sold and transferred by the trustee for the best procurable price, with which the indebtedness was liquidated; and denying any fraud, deceit, concealment or conversion, defendants ask dismissal of plaintiff’s bill.

The case was heard upon testimony taken in open court, which went very fully into the history of this unfortunate business venture from the viewpoint and facts claimed by the respective sides. An advisory jury on the proposed issues of fact was at first called, but after listening to the evidence the court dispensed with its services and dismissed plaintiff’s bill, saying in part:

“There was a resolution passed by a majority of the stockholders in number and amount and the plaintiff in this case was present at that meeting in which that resolution was passed, took part in it, entered into the discussions, signed the agreement between the parties. If there was anything at all that was illegal in this matter or oppressive to the minority stockholders it was the feature of it that provided for the disposal of that property and re-organizing and putting it into the hands of the parties by the payment of $500. It was later sold without that requirement being carried out and entered into. There was no action taken by the plaintiff till he had been relieved of his liability as guarantor and indorser on paper of that company to the extent of several thousand dollars. The entire condition had changed^ and it appears to the court that he is not in a position to come into this court at this time and complain; that he ought to be estopped from coming in. There was a time to provide for the best interests of all the stockholders, himself included, when the property was not being sold, on application to this court or it could have been disposed of any time as pointed out by the statute. He failed to do that. At that time the rights of all the parties could have been taken care of, and these several parties that rely on it, for these large amounts of paper of the company as indorsers and guarantors of the several banks. He had an opportunity not only to protect himself but the rights of the stockholders and he failed to take that step until he had been released and relieved of that large liability that stood against him, neither does it appear in this case by any proof that that property ought to or could have brought more under any circumstances or conditions that existed, and that being true it does not appear that even the assignors with their small claims put into the hands of Mr. Marcoux have met with loss and damage, and that being true I think in this case that the bill ought to be dismissed,” * * *

Appellant’s counsel say in their brief that the three controlling points in the case which the court erroneously decided adversely to their contention are as follows:

“1. Did plaintiff’s stock have a substantial value?
“2.-Was there a conversion of the stock?
“3. Is plaintiff estopped from maintaining this suit?”

The principal stockholders and promoters of this elevator company were also stockholders of the Citizens State Bank of Pinconning, of which plaintiff and certain of defendants were directors, Naumes being cashier and Val B. Klumpp assistant cashier. That the elevator then in Pinconning did its banking business with a rival bank is ascribed as one' of the motives in this promotion. Plaintiff was a prospérous farmer of recognized responsibility in that community and became a subscriber for stock in the new elevator project at the proposal, as he states, of defendants Naumes, Barie and others, first subscribing for $1,-000. He participated in the organization and was a director from the beginning. The directors of the Citizens State Bank and Farmers’ Elevator Company were largely the same. Defendant Reardon, who was an experienced elevator man living at Midland and in a business of his own, was employed as manager under a written contract of August 1, 1911, at $1,000 a year. He at first subscribed for 100 shares of stock and took charge of erecting the plant. He became a director 19 months later and took more stock when emergencies for money arose until he held and had paid for $5,000 in stock when the property was sold. One thousand dollars salary was paid him for two years and two months, then reduced by his consent to $500 per year, which was paid him for three months, until April, 1914, after which he received no compensation for his services. He testified, and it is nowhere directly disputed, that when the organizers of the company engaged him it was understood he was not to look after the financing, but to furnish his knowledge and experience in constructing the plant, selling the product, directing the buying, etc., through hired help in direct charge; that he told them on the start it would take a good deal of money to carry out. their project, and plaintiff spoke up and said, “we have got the money. We intend to put in buying stations all around,” and in the meeting when they organized “Mr. Naumes, Mr. Marcoux and Mr. Barie seemed to be the most enthusiastic men”; that he built just what they asked for, though too large for the local business, with a view to reach the open territory which could be made tributary; but they did not put up the money to establish stations at other points and the territory was taken up by competitors. None of the stockholders, except the indorsers and board of directors, increased their original subscription, the plant was not making any money, they were not reducing their liabilities, it was voted at a stockholders’ meeting in August, 1915, to mortgage the plant for $15,000, which Naumes was to look after, but nothing came of it; he had secured a loan of $10,000 from a Saginaw bank for the company on the indorsement of himself and the other directors, which they had carried for a couple of years and was then being pressed; the company had no money to do business with, its credit was impaired, he and the other indorsers were unwilling to assume further liability and the action authorizing him to sell the property to pay debts was taken as related ; that when Hand bid in the property at the public sale for the debts Naumes said he would look after the matter and the money would be forthcoming, but no money was paid in and he thereafter sold the property for enough to pay the debts, as he had been authorized to do, which was the best price he could obtain, and losing as a result of the sale $5,150 which he had paid for his stock, and, after completing his trust by paying all the company debts with the proceeds of the sale, had no interest in the property sold or its further disposition or use.

It is undisputed that this pretentious project to center the elevator business in Pinconning was unsuccessful and all stockholders lost the money they, paid for stock in the concern, including plaintiff and defendants, unless the latter by some secret combination and agreement fraudulently absorbed and acquired “all of the assets of said corporation” and thereby converted the stock of plaintiff, and all other stockholders not in the conspiracy, to their own use, and in the name of a dummy, or secret trustee, now control and operate the property of the elevator company for their own benefit as plaintiff alleges, and as to which the burden of proof rests upon him. His only claimed circumstantial proof to establish this is that the property was sold to one of defendants for less than it was worth, and not to all the eight parties to this suit, including himself, as was contemplated under the agreement of November 2, 1915.

The logic of his grievance as to the agreement of November 2d being abandoned would seem to be that it was a conversion to sell the property, for the amount of the company’s debts, to the seven stockholders or to one of them for the use and benefit of himself and six others, but it would not be a conversion if all the eight stockholders who signed the agreement had bought it for the amount of the debts. He testified that he would not have voted at the stockholders’ meeting as he did, authorizing Reardon as trustee to sell the property for the amount of the debts, “if it had not been for that previous agreement” and says that, after the property was bid in by Hand,—

“I went into the bank at Pinconning and asked Mr. Naumes what the reason was that the transaction didn’t go through. He had lots of reasons, didn’t have the money was one, and told me to see Fred. Klumpp, so I went to Fred. Klumpp’s store and stated that to him. Mr. Klumpp and I went to the bank. We went into the back room, he and I and Mr. Naumes. Mr. Klumpp seemed to be very anxious to put the matter through and so was I”;

It is undisputed that after Fred. Klumpp bought and paid for the property, so that defendant was released from all liability as an indorser, Klumpp offered him not only an eighth, which would be his interest had they “put the matter through,” but a quarter or a half on the same basis of cost, which it is inferable he was financially able to take if he so desired, as he states: “I told Mr. Hand that I wouldn’t go into that deal any more unless I would get the controlling stock in that elevator.” It is also argued in plaintiff’s brief that “the $500 agreement, Exhibit U, does not provide that the subscribers shall be favored over the other stockholders,” but upon the trial his counsel said:

“We want the record to show that the $500 agreement was entered into by these parties for the purpose of restricting any open competition at the sale.”

The claim and testimony of defendants as to this agreement is that the parties to it were all liable for a large amount as indorsers and it was signed with a view of protecting themselves by taking the plant for its debts provided they could not find a buyer who, would pay the amount of the debts of the company for its property and relieve them of it. But, whatever was intended, it was a crude and imperfect instrument purporting to obligate the signers to pay $500 on or before an unstated time, for a purpose no one is designated or obligated to carry out, including payment of the company’s debts amounting to nearly four times the total sum they were to pay Reardon as trustee. Failure of the signers to act under it, of which plaintiff complains, is not evidence either of fraud or conversion of the company’s stock by defendants.

The record does not bear out plaintiff’s claim that he was misled and deceived by defendants as to the financial condition and business of the company. He was a director of the company, a regular attendant at their meetings, and an active participant in its affairs from the beginning. His son was employed by the company at his suggestion, first as its bookkeeper and later in local charge of the plant. He had access as a director to its books and records and special opportunity to keep in touch with its affairs, which as a director it was his right and duty to do. As a director in the bank where its banking was done he had further opportunity. In “a general discussion among the large body of men,” who were stockholders, meeting to discuss the financial affairs of the company, he offered his stock without cost to any one who would relieve him from his indorsements for this company of which he was a director, and voted for a sale of the property at a price sufficient to produce that result.

Plaintiff strenuously argues that the trial court erroneously found it was not shown that the “property ought to or could have brought more under any circumstances or conditions that existed.” Upon the question of value the conditions that existed were the important consideration. That the property was openly offered at public and private sale and no one was found who would pay more than it was sold for is undisputed. The testimony is at variance as to the value of the property at the time and place it was sold. That it was a large and good elevator, well adapted to the purpose for which it was built, and capable of handling a large business, if the business was available and the company financed to handle it, is conceded, but the testimony is convincing of the deterrent condition that both were wanting.. The situation is well stated in the report of an insurance adjuster named Wardwell, introduced by plaintiff to show the cost and value of the property, made after examining the plant to determine a basis for fixing insurance. Plaintiffs counsel state that the “great value of his report lies in the fact of its total impartiality.” He estimates the cost of the building at $13,000, machinery and plumbing at $10,000, and other equipment at $1,200, from which he deducts five per cent, for depreciation, making the then (1914) cost value $24,-000, but in discussing surrounding conditions and the affairs of the company he states: “The investment here is double what the business warrants, and good money has been thrown after bad,” which is in substance the reason given by other experienced elevator men called by defendants for their opinions, that the property was sold for all, or more, than it was worth. We do not disagree with the conclusion of the trial court that plaintiff has failed to establish the contrary by a preponderance of evidence.

It is fairly shown that this corporation had proved unprofitable, was in a failing condition, had no money to pay its maturing debts and was without credit to renew the same or obtain means to conduct its business, unless defendants or other acceptable stockholders became personally responsible. Previous indorsers for its indebtedness to a large amount, who were not only its directors but most interested in its successful continuance if possible, refused to assume further liability, and at different times offered their stock gratis to be relieved of liability; doing so at the meeting of stockholders called to consider the financial condition of the company with no one indicating any inclination to accept the offer. That meeting authorized, by a large majority of members and amount of stock, what is now complained of.

It is true that our statute authorizes a method for winding up the affairs of a corporation when in failing condition by appointment of a receiver and it is argued that the course pursued here was irregular and unauthorized. While the statutory method would be more regular and apparently the wiser course in case of an objecting stockholder, the statute does not make unlawful other methods taken by authority of the majority where all have equal opportunities to purchase the stock of others, or assets of the corporation at public or private sale; neither does plaintiff ask that the course taken here be annulled and a receiver appointed. His counsel say in their brief:

“It is not sought by this suit to recover the property or to set aside the sale, but merely to recover the value of the stock.”
“The right of the majority stockholders of a corporation established for manufacturing or trading purposes to wind up its affairs, and dispose of its assets, even against the objections of the minority stockholders, whenever it appears that the business can be no longer advantageously carried on, is well recognized. Treadwell v. Manufacturing Co., 7 Gray (Mass.), 393; Wilson v. Proprietors, 9 R. I. 590; Lauman v. Railroad Co., 30 Pa. St. 42.” Hayden v. Directory Co., 42 Fed. 875.

The general rule is stated as follows in 10 Cyc. p. 1302:

“In corporations organized for business purposes and for the private gain of their members, the principle of the rule of the majority obtains to the extent that if the majority conclude that the business cannot be carried on with profit or advantage to all, they may, against the will of the minority, elect to wind it up. So if. in the exercise of a sound discretion, a majority of the stockholders deem it expedient to do so, they may sell out the whole property of the corporation.”

To discontinue a failing business and proceed to sell the property and pay the debts is not a breach of trust. Rothwell v. Robinson, 44 Minn. 538 (47 N. W. 255).

“If, however, the corporation is an unprofitable and failing enterprise, then a sale of all corporate property with a view to dissolution may be made.” 2 Cook on Corporations (6th Ed.), § 670.

Amongst the numerous eases cited to sustain this general proposition appears Doyle v. Leitelt, 97 Mich. 298.

The case of Thoman v. Mills, 159 Mich. 402, is somewhat analogous to this in the particular that defendants also took what the trial court termed a “short cut to the inevitable result” and did not approve that course, but, finding that the sale was made in good faith and the result would have been the same if legal formalities had been observed, awarded only nominal damages. In the controlling opinion approving the result and affirming the decree this court said:

“It is not believed a case can be found where relief was granted to a stockholder in a prior corporation which was sold to a later corporation under the circumstances disclosed by this record.”

That case, however, differs from this in various material particulars. There the assets of a prior corporation were sold to a later corporation in which defendants were interested; complainants did not vote in favor of the sale at the stockholders’ meeting authorizing it, nor was the property offered at public sale, or equal opportunity given to them and other stockholders to purchase.

At conclusion of the hearing, after intimation from the court that the bill should be dismissed, defendants’ counsel moved the court that the corporation be made a party plaintiff, and defendant Val B. Klumpp have permission to file an amended answer asking for confirmation of his title to the property, - which was objected to by counsel for the plaintiff, and the court intimated that course would be permitted, an order of that kind would be made and a decree to that effect granted. We find no record of any order making the corporation a party to the suit, bill of complaint by it or amended answer as proposed, but the decree dismissing plaintiff’s bill also contains a provision quieting the title of defendant Val B. Klumpp to the real and personal property conveyed to him by Reardon as trustee with costs to defendants. In behalf of plaintiff the latter portion of the decree is strenuously objected to as not warranted by any pleading or issue in the case, and it is insisted that at least nominal damages should be awarded to him with costs, or if the bill is dismissed it should be without costs in view of the course pursued by defendants.

It is charged as one of the grievances in plaintiff’s bill that for the purpose of completing the conversion of his stock in' the corporation defendants filed with the secretary of State, on December 18, 1915, a notice of dissolution of said corporation effected by sale of all its property, corporate rights and franchises. Defendants admit this in their answer, but deny that it was done for the purpose of converting plaintiff’s stock, alleging that it was in the interest of plaintiff and all other stockholders. While defendants could not technically dissolve the corporation by such proceeding, neither they nor the corporation as such are in an equitable position to insist upon its being made an active participant as plaintiff in this suit, and then ■in behalf of one of defendants ask to amend his answer by adding a cross-bill for the purpose of quieting his title under a conveyance it gave through a trustee which neither the corporation nor plaintiff has questioned, the theory and purpose of this suit being to recover from defendants the value of plaintiff’s converted stock,' not to set aside or attack the sale as such nor recover the property sold.

We agree with the conclusion of the trial court that plaintiff has failed to establish his right to recover under the allegations in his bill, which should be dismissed, but find nothing under the circumstances disclosed in this case to move the conscience of a court of equity upon either side.

The decree of the lower court should be limited to dismissing plaintiff’s bill, and so modified will stand affirmed without costs to either party.

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


text:
    McKEE v. CITY OF GRAND RAPIDS.
    1. Taxation — Municipal Corporations — Special Assessments— Public Improvements — Sewers.
    Where the common council of the city of Grand Rapids complied with the requirements of its charter and the provisions of the several special acts authorizing the building of a trunk sewer, and the erection of a flood wall, each improvement being paid for out' of funds as provided in said special acts, there is no merit 'in the contention that there was a prohibited double improvement under a single assessment, although to save expense both improvements were carried along at the same time, by the same contractor, and under the same contract.
    2. Same — Double Improvements — Irregularities—Estoppel.
    If there was any irregularity in this particular, plaintiffs are estopped from raising it by their conduct in standing by and seeing these public improvements going on without legal protest, and in failing to mention it in their appeal from the board of assessors to the common council under the charter provision requiring the grounds of appeal and matters complained of to be stated in writing.
    •3. Same — Assessment Districts — Discretion oe Oeeicers — Conclusiveness — Mistake—Fraud.
    The determination of municipal officers, in whom discretion is vested to decide upon assessment districts and levies of assessments, is conclusive in the absence of mistake or abuse of discretion amounting to fraud.
    4. Same — Grand Rapids Charter — Review—Equity.
    Under the charter of the city of Grand Rapids (Act No. 593, tit. 6, § 45, Local Acts 1905), any mistake or fraud in such proceedings may be reviewed in chancery and corrected where clearly shown.
    5. Same — Special Taxes — Mistake—Fraud.
    In an action by landowners to restrain the city of Grand Rapids from collecting certain special taxes levied upon plaintiffs’ lands in said city, evidence held, to sustain the conclusion of the court below that there was such a palpable discrimination against plaintiffs and an unequal assessment relatively so out of proportion to benefits as to amount to a legal fraud, entitling them to a correction of such error on “equitable principles” as provided in defendant’s charter.
    6. Same — Correction of Mistake — Tender—Equity.
    Where plaintiffs, before commencement of suit, tendered the city a certain sum, which was in excess of the amount fixed in the decree of the court below, and in their verified bill said upon oath that the amount so tendered was fair, just, and equitable for possible benefits in such improvements, this court, in correcting the error on “equitable principles” will modify the decree of the court below to correspond with the amount tendered.
    Appeal from superior court of Grand Rapids; Dun-ham, J.
    Submitted June 6, 1918.
    (Docket No. 45.)
    Decided December 27, 1918.
    Bill by James L. McKee and others against the city of Grand Rapids and another to enjoin the collection of special assessments. From a decree for plaintiffs, defendants appeal.
    Modified, and affirmed.

      Elvert M. Davis and Earl F. Phelps, for plaintiffs.

      Ganson Taggart, City Attorney, and Charles A. Watt, Deputy City Attorney, for defendants.
   Steere, J.

Plaintiffs’ bill seeks to restrain collection of certain special taxes levied upon their lands for a local improvement in the city of Grand Rapids called the “East Side Trunk Sewer.” When suit was begun the sewer had been constructed, the special tax assessed and the tax roll for the assessment district in the hands of the city treasurer who was about to proceed with enforcement of payment by a tax sale of plaintiffs’ land delinquent for the special taxes assessed thereupon. After answer and replication the case was duly heard on pleadings and proofs taken in open court. Although certain technical objections were •made to the tax proceedings involved, plaintiffs’ most serious and insistently stressed objection to the taxes against their property was, as stated in their bill, that they are—

“grossly disproportionate to the benefits that have accrued or will accrue to the said property from the construction of the said sewer, and for the reason that the said assessments against the property of your respective orators are inequitable, unfair, excessive and discriminatory, and for the reason that the said assessment is arbitrary and is not applied with compliance to any uniform rule in the said assessment district and is not assessed by any tangible process of equal and fair distribution of benefit.”

A volume of evidence, mostly documentary, was introduced showing the various official proceedings, steps taken and things done pursuant to them resulting in the construction of the sewer, and levy of this tax, and also a flood wall along the river at the same time. The issue to which the oral testimony was largely devoted was whether the taxes in question were so excessive, unfair and discriminatory in fact as to call for equitable intervention by the chancery court. The trial court so held, and, presumptively acting under authority of the city charter, made a re-taxation or reduction of the taxes complained of, finding and decreeing in part as follows:

—“that the lands described in complainants’ bill of complaint herein * * * and assessed for benefits by the board of assessors of the city of Grand Rapids upon the assessment roll for the construction of the 'East Side Trunk Sewer,’ so-called, at $2,515, is excessive, inequitable and unjust in causing the complainants to pay towards such improvement a sum greatly in excess of the benefits received thereby, and that such assessment was a grave and gross mistake by said board of assessors, and is fraudulent and unjust as against said complainants, and should be decreased from $2,515 to $454. * * *
“It is therefore ordered, adjudged and decreed by the court now here, that the assessment upon complainants’ property described in their bill of complaint, for the 'East Side Trunk Sewer,’ so-called, for the sum of $2,515, be set aside as a void assessment, except as to the sum of $454, which shall be in full against said land and against said complainants for such improvement.”

From this decree the city has appealed, contending that no ground is shown for equitable interference to disturb the judgment of the .board of assessors provided by law to determine and decide, and that in any event the reduction made is grossly excessive, the tax imposed by the court being much less than that plaintiffs admitted would be a just and equitable assessment.

The three objections made against this special assessment by plaintiffs and argued in counsels’ briefs are, that the same is excessive, not in proportion to benefits, unequal and oppressive, as before mentioned; that it involved a single assessment for a double improvement, and that the advertisement of plaintiffs’ land for sale as delinquent did not comply with charter requirements.

Of the last objection it need only be noted in passing that defendant admits a technical failure to fully comply with the charter in the respect pointed out, and that in any event the preliminary injunction granted at commencement of the suit halted further proceedings and rendered the taken steps to advertise the tax sale of this land on a specified date nugatory, so that re-advertisement would be a prerequisite to a valid sale of plaintiffs’ land for the delinquent special taxes assessed against it.

Plaintiffs’ contention that there was a prohibited double improvement under a single assessment is based upon the fact that a flood protection, or dock-line wall, was built along the east side of the Grand river at the same time the East Side Trunk Sewer which ran along the river just back of it was built and the work was done by the same contractor under a contract with the city which included both operations. This plaintiffs urge is forbidden by previous rulings of this court in Clay v. City of Grand Rapids, 60 Mich. 451, and Peck v. City of Grand Rapids, 125 Mich. 416.

Grand Rapids lies on both sides of the Grand river which flows southerly and centrally through it in a locality where the irregularities of the topography and recurring high stages of the river cause unusual difficulties and expense in providing for the more or less related necessities of surface drainage, sewage and flood protection. In addition to the power conferred by the city charter under which various improvements of that nature were made by the' municipal authorities from time to time, special legislation was secured authorizing heavy bonding, when ratified by a plebiscite, for expenditures to relieve the situation by construction of large trunk sewers on both sides of the river and flood walls or dykes along it.

In 1905 the legislature passed a local act (Act No. 668) authorizing conversion of the so-called West Side Big Ditch in the city of Grand Rapids into a sewer, its improvement and extension, authorizing the city to borrow not to exceed $120,000 by bonding for said purpose in anticipation of a levy and assessment of taxes to meet the same.

In 1907 a local act (Act No. 643) was passed authorizing the city to borrow $300,000 for the purpose of “establishing and constructing trunk sewer or sewers upon either side of Grand river, from or near the south city limits of said city, so far up the river or along or near either bank thereof, as may be found necessary by the common council of the city of Grand Rapids, in anticipation of the collection of assessments and taxes to defray the expenses and cost thereof,” etc. Each of these local acts in regard to sewers authorizes the designation of benefited districts for special assessment and taxation in accordance with the methods provided in the city charter.

In 1907 a local act was passed by the legislature (Act No. 413), entitled:

“An act to authorize the sale of bonds by the city of Grand Rapids, Michigan, to meet the cost of flood protection of said city from the waters of Grand river and streams tributary thereto, including moneys heretofore used therefor.”

This act authorized the issuing of $1,000,000 of bonds for such purpose, if approved by a popular vote, directing that the proceeds of the sale of such bonds, or such portion thereof as was found necessary, should be used—

—“exclusively for the protection from floods of Grand river and streams tributary thereto within the limits of said city by dykes or walls or both, or otherwise, and the scaling of the river bed within the city limits, or for such other method of protecting the public from their floods or unsanitary conditions as may be decided by a two-thirds vote of the common council; also their proceeds may be used to reimburse the city for moneys used since January 1, 1906, for flood protection on Indian Mill creek and Grand 'river.”

Bonds issued for this purpose were to be “executed and certified in the same manner as bonds issued under said city charter for public improvements other than street improvement or sewer construction bonds,” which under the charter are met by a general tax imposed therefor upon the whole city.

Under the provisions of those special acts and the city charter the common council took the requisite preliminary action necessary to authorize the needed improvements and the city proceeded with the work in accordance with approved and adopted plans, by scaling the river, building flood or dock walls along it and, more directly involved here, constructing a trunk sewer down the east side of it, picking up the openings or outlets of other sewers which emptied into the river, so as to carry their flow down stream to the pumping station at or near the city limits, and thereby both relieve the river from them within the city limits, and facilitate the discharge of the sewers which high water in the river at times obstructed. Proceedings were taken to authorize and provide payment for the flood Avail under the local act upon that subject, entirely independent of the sewer proposition. Its location was necessarily at the river margin without regard to where the sewers ran. Under other appropriate legislation the common council determined the east side trunk sewer was a necessary public improvement and made provision for its construction. When the question of its exact location was under consideration it was suggested by the engineer’s force of the board of public works, which had control of the improvement, that a great saving could be made by locating the sewer for a part of the distance closer to the flood wall and having the two improvements carried on contemporaneously or in combination, each to be paid for out of its separate fund.

Estimates for each, reports and resolutions were had to this end and the work was carried on in one operation as proposed at a total cost of $370,675. The cost of the flood wall as computed (and so determined by resolution of the common' council) amounted to $81,900. This was paid from the flood fund by direction of the council. The cost of constructing the east side trunk sewer, found to be $288,775, was by proper official action assessed pursuant to the provisions of Act No. 643, Local Acts of 1907, and the city charter. There was but a single assessment for that single improvement; the cost of the flood wall did not enter into it. It is not a case of doing one thing and calling it something else. There was no special district designated or special assessment spread for the wall, which was separately provided for by bonds under a different law, to be eventually paid by the city at large. There was no misnomer, misapprehension or deception in providing for and carrying on one public improvement in the guise of and under a provision of law applicable to another, as in the cases cited by plaintiffs; no confusion as to districts benefited could arise, one improvement being paid for by the entire city and-the other by a district fixed by the council. The inhabitants of the city had opportunity to be heard on each of these public improvements, which were separately provided for and neither included in the other.

But conceding a technical irregularity in that particular, plaintiffs stood by and saw these public improvements going on and completed at heavy expense to the city without legal protest or objection. It was a pretentious undertaking of general interest, entered upon and carried out after long preparation and public discussion. The property involved here was low land near the river and necessarily within the assessment district; some of plaintiffs had sold to the city from other land not far distant the right of way for these improvements, receiving $5,500 therefor, exaction of which is suggested as influencing official action in imposing the tax complained of. Plaintiffs appealed from the board of assessors to the common council, as authorized by the city charter which required the grounds of appeal and matters complained of to, be in writing, without mentioning this objection. Failure to make timely and legal objection after knowledge and opportunity estops them from later contesting the tax on such ground. Moore v. McIntyre, 110 Mich. 237; Auditor General v. Bishop, 161 Mich. 117.

The property of plaintiffs upon which the taxes complained of are assessed is vacant, said to consist of. about 3 1/3 acres, and lies along the west side of Market street north of Wealthy avenue in the southerly portion of the city, from a half to three-fourths of a mile below its business center, near and on the east side of Grand river in a location which plaintiffs’ counsel designates as a factory district. It has sidetrack facilities at the rear, and, as Mr. McKee testified, is suitable for houses, light manufacturing, coal yards and, he expected or hoped, would be available for wholesale business. It is platted into lots fronting on Market street, which is a graded, paved and sewered thoroughfare. On the west, at its rear, it joins a tract of land belonging to the city, known as the Market property, consisting of about 20 acres which fronts along the river, and has upon it a city market, lighting station, baseball park, garbage burner, dog pound and other buildings. Most of the city ■ market property was formerly an island in the river with a channel to the east, covering what is now a portion of plaintiffs’ property, deep enough to be navigable by steamboats then in use, but which in the progress of improvements was filled in and the river confined to the west channel. Litigation over the subject terminated in what is called a “compromise line” running along the bed of the old east channel and dividing it between the city, which owned the island, and the shore owners whereby plaintiffs’ lots acquired 48 feet additional depth on the west end. The lands in that locality along the river were naturally low, just how low relatively, how much affected by the condition of the river, and how much different descriptions had been filled in, or raised, was a fruitful topic of more or less conflicting testimony. Plaintiffs’ land and the city market had been raised by filling to practically a level with Market street, as had other descriptions in that vicinity, while others had not. The market property was taxed for this sewer, which passed through it, at $2,724.

It is accepted as a general rule that the determination of municipal officers in whom discretion is vested to decide upon assessment districts and levies of assessments should be treated as conclusive in the absence of mistake or abuse of discretion amounting to fraud. That mistake or fraud in such proceedings which prejudices the property rights of the person whose property is taxed may be reviewed in chancery and corrected where clearly shown is recognized in defendant’s charter as follows:

“No mistake or error in the proceedings in regard to the opening or improvement of streets, avenues, public ways or alleys or in the construction of sewers, or in the assessment or collection of costs or expenses thereof, or in the proceedings for the assessment or collection of municipal taxes in said city, or any irregularity in any special or city tax roll by reason of the proceeding therefor not being had within the time required by law, or the property having been assessed to the_ wrong owner, or any irregularity, informality or omission or want of any matter of form or substance in the proceedings that does not prejudice the property rights of the person whose property is taxed, shall defeat the city in the collection thereof; but any such errors may be corrected on equity principles under the direction of the common council of the city, if discovered before suit is brought thereon or by the court after suit is instituted, and the equitable amount due the city may be enforced as though no such error had occurred.” Title 6, § 45, Act No. 593, Local Acts 1905.

To sustain the charge of fraudulent assessment which prejudiced their, property rights, plaintiffs amongst other things introduced testimony tending to show that in the so-called “flood district” and within the vicinity of their land certain surrounding property in many respects similarly situated was assessed so low in comparison with theirs as to indicate an abuse of discretion amounting to fraud. Summarized from this comparative proof in relation to surrounding descriptions it appeared that, computed on both a basis of front foot and square foot assessment, plaintiffs’ property was assessed $2.50 per front foot and 17 mills per square foot, while land bounding it on the west was assessed 60 cents per front foot and 1 to 3.2 mills per square foot; on the north 44 to 60 cents per front foot and 1 to 3.2 mills per square foot; on the east across the street 58 to 90 cents per front foot and 1 to 7 mills per square foot; upon the south 25 cents to $1.15 per front foot and 2.2 to 2.6 mills per square foot. Without going through the testimony in full detail, for better understanding of their comparative value the following is fairly illustrative: The city market property consisted of 20 acres with various buildings upon it. It was practically upon the same level and adjoined plaintiffs’ land on the west. While not fronting upon any street, it fronted on the river and had a public approach from Market street. It received direct benefit of this sewer, which ran through it but did not touch plaintiffs’ which was upon a sew-' ered street for which a special sewer tax had been imposed and paid by plaintiffs. This property was assessed at 60 cents per front foot and 3.2 mills per square foot. A piece of land called the Godfrey property, just east of and mostly lower than plaintiffs’, was assessed at 82 cents per front foot and 7 mills per square foot. Four lots directly across Market street from the center of plaintiffs’ property and over four feet lower, were assessed 90 cents per front foot and 7 mills per square foot. Two lots directly across Market street at the south end of plaintiffs’ property, and much lower, but occupied by three dwelling houses, were taxed 58 cents per front foot and 11 mills per square foot. A piece of land called the Kent parcel, lying across Market street east of the north end of plaintiffs’ land and running north one block, in the flood district but some higher than plaintiffs’, was assessed 44 cents per front foot and one mill per square foot. A piece of property of 3 1/3 acres belonging to the gas company, several feet lower than plaintiffs’, situated about 150 feet south of it and across Market street, upon which was a gas plant, was assessed at $1.15 per front foot and 2.5 mills per square foot. Land occupied by the street railway power plant, lying just south of the gas company property, was assessed at $1.09 per front foot and 2.7 mills per square foot. A piece of property belonging to the Manufacturers’ Realty Company, upon which was a box factory, lying across Market street and some distance southwest of plaintiffs’ property but in the same flood district and much lower, was assessed 70 cents per front foot and 2.4 mills per square foot. To the extent these lands are shown to be lower than plaintiffs’ and more subject to be flooded, they would appear to receive greater benefit from the improvement. There was also some property across Wealthy avenue and southwest of plaintiffs’ land, much lower and in the flood district, upon which under an agreement relative to right of way the city had contracted to pay all of this special assessment in excess of $250. There was no excess. It was assessed 28 cents per front foot and 2.3 mills per square foot, the total being $246. The mathematical accuracy of these figures fairly appears. Their significance is a matter of controversy.

The proof as to area, elevation above the river and various assessments and comparative computations show that relatively plaintiffs’ land was assessed about four times lands near it in the flood district on the west, five times as much as the lands shown on the north, five times as much on the east and from three to ten times as much on the south, with no proof of greater benefits to account for such marked discrepancy.

The record well sustains the conclusion of the trial judge that the evidence shows a palpable discrimination against plaintiffs and unequal assessment relatively so out of proportion to benefits which are proven or can be found from the testimony as to be in legal effect a fraudulent assessment, or abuse of discretion, or at best a material mistake prejudicial to plaintiffs’ property rights entitling them to a correction of such error on “equitable principles,” as provided in • defendant’s charter.

It is not, however, necessary to accept as proven plaintiffs’ direct charges of intentional fraud or personal purpose to produce such result on the part of the assessing officers. The assessment of this large district with several thousand descriptions of land, of varying kinds, shapes and conditions, benefited in varying degrees according to location and elevation, was a formidable undertaking in which occasional misapprehension and mistakes on the part of the assessors were likely to occur. A few extracts from their testimony illustrate this. One of them interrogated as to a certain description answered as follows:

“Q. Do you know that you assessed the street railway company at 2.6 mills and McKees’ (plaintiffs’) at 17 mills per square foot per area?
“A. Who did that figuring?
“Q. If those are the figures, it would be a just assessment, would it?
“A. No. * * * We intended to assess the lower land that was more liable to flood for greater benefits than the land that was higher and less liable to flood.”

Asked about the gas company’s land which the testimony shows was several feet lower than plaintiffs’ he said:

“It lies a little higher than McKees’. I so considered it at the time we made the assessment and do now.”

When asked about a tract of land directly across Market street east of plaintiffs’, shown by the testimony to have been in the flood district and over four feet lower, he said:

_ “That was benefited less than McKees’. Quite a bit less. It is on the east side of Market avenue where it is high and dry, good land.”

Another assessor, asked about a piece of land in the flood district called the Wagemaker property and shown to be much lower than the plaintiffs,’ testified:

“I should say that the Wagemaker property was better located at that time. It was higher. It was not flat land. * * * In my judgment, at this time, the Wakemaker property would be about equally benefited with McKees’ property north of Wealthy. * * * I don’t know as I can give you any other reason why we assessed McKees’ property north of Wealthy at 11 or 12 times as much as we did the Wagemaker property. * * * I have stated that McKees’ land south of Wealthy had a higher elevation than the McKee land north of Wealthy. That is the way we understood it at the time we made the assessment.”

The property involved in this suit and much of that with which it is compared lies north of Wealthy avenue. This assessor said of their method of assessment, “North of Wealthy we had another territory or district and we figured that per square foot.” Plaintiffs’ 3 1/3 acres was assessed at $2,515, and the adjoining market property of about 20 acres at $2,724. One assessor, when asked how they arrived at $2,724 for the market property, answered, “You have got me guessing; I don’t remember.”

The trial court apparently concluded plaintiffs’ property should be assessed no more per acre than the market property, and reduced the assessment to $454. Defendants urge various distinctions in the two properties other than acreage and press reasons against so radical a reduction, including admissions in pleading and estoppel by tender.

Before commencement of this suit plaintiffs tendered the city $1,355.28 in full payment of their various assessments in controversy amounting to $2,515. This tender was made by plaintiff J. L. McKee, one of the owners, who was authorized to represent his co-plaintiffs. He is an attorney and had charge of the transaction. He was familiar with the subject and showed by his testimony a comprehensive knowledge of the property in that locality, its relative values, and the uses to which it was adapted, had evidently studied and compared these assessments, etc., and was experienced in such matters. In plaintiffs’ verified bill they all say upon their oaths that the “amount so tendered by the said McKee was considered by said plaintiffs at the time he made such tender to be a fair, just and equitable amount that should be assessed upon said property for any possible benefits derived from said east side trunk sewer.”

It is true the money was not deposited in court, nor is any formal withdrawal of the tender shown, and while not operating technically to preclude plaintiffs from asserting in suit their various defenses against the assessment complained of, it is a persuasive consideration in determining “the equitable amount due the city” under the assessment. It is stated as a general principle that:

“A tender is ordinarily an admission of an amount due equal to the sum tendered even though the tender is insufficient in form, or is made in a case where a valid legal tender cannot be made; and it dispenses with proof of everything that would otherwise be necessary to enable plaintiff to recover * * * to the extent of the sum admitted to be due.” 38 Cyc. p. 163. Citing numerous cases.

Upon this record as a whole, and with due regard to the evidence bearing upon actual benefits conferred, as well as plaintiffs’ tender and their views expressed under oath in their bill that the amount was fair, just and equitable for possible benefits from such improvements, we conclude that in correction of the error on equitable principles the decree should be modified in amount to correspond with the amount tendered. So modified it will stand affirmed, without costs to either party.

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