author: Kuhn, J.

text:
    CHANDLER v. PRESTON.
    1. Trusts — Existence of Relation of Trustee and Cestui Que Trust.
    The relation of trustee and cestui que trust begins with the execution of the trust agreement; during the pre-' liminary negotiations no such relation exists.
    2. Same.
    Although prior to the execution of a trust deed and agreement the proposed trustee offered to assume said trust for a certain compensation, he had a legal right, prior to .its acceptance, to withdraw said offer and submit a new one naming a larger sum, notwithstanding his action was induced by information received from an agent of the cestui que trust that the latter would pay more than the sum first named.
    3. Same-^Breach of Trust.
    The withdrawal by the proposed trustee of his first offer, and his acceptance of a counter proposal by the cestui que trust naming a larger amount, did not constitute a breach of trust or a fraud upon the latter.
    4. Same — Breach of Trust — Termination—Conduct of Trustee —Evidence—Finding of Court.
    On a bill for the removal of the trustee, for an accounting, for the termination, of the trust, and to determine the amount of compensation to he paid the trustee for services already rendered, testimony held, to sustain the finding of the court below that in the sales of trust property made, and the prices obtained for same, the conduct of the trustee was not open to criticism.
    5. Same — Compensation of Trustee — Mutual Mistake — Rescission.
    The fact that the sales of land during the existence of the trust did not amount to as much as contemplated, held,, not to justify the holding of the court below that therefore the compensation of the trustee was fixed under a mutual mistake of fact and should be rescinded.
    6. Same — Accounting—Construction of Contract.
    Where the trustee neglected to furnish the money at six per cent, to take up mortgages bearing seven per cent, when they matured, as the trust agreement provided he should do, he should be charged with the amount paid in interest in excess of six per cent, on the overdue mortgages after maturity.
    7. Parties — Interveners—Statutes—Interest in Litigation.
    Under 3 Comp. Laws 1915, § 12362, an attorney who acted as a go-between in the procurement of a trust agreement, and who was to receive part of the compensation to be paid to the trustee for his services, had such an interest in the subject-matter of the litigation as would give him the right to intervene in a proceeding involving the right of the trustee to recover under the contract.
    8. Principal and Agent — Dual Capacity — Notice — Agent’s Right to Recover.
    Under well established rules of law, where the principals have knowledge of the fact that an agent is acting in a dual capacity, and assent thereto, he may recover for his services from either party.
    Appeal from Alpena; Emerick, J.
    Submitted April 30, 1919.
    (Docket No. 46.)
    Decided October 6, 1919.
    Bill by Merritt Chandler and another against Thad B. Preston and another for the removal of defendant Preston as trustee, for the termination of the trust, and for an accounting. George E. Nichols intervened, claiming an interest under a contract with defendant Preston. From the decree rendered, all parties appeal.
    Modified, and affirmed.

      Henry & Henry (H. E. Spalding, of counsel), for plaintiffs.

      Hawley & Eldred, for defendants.

      Ellis & Ellis, for intervener.
    This is a bill for the removal of a trustee. It prays also for an accounting, for the termination, of the trust, and for the reconveyance of the trust property to the plaintiff Merritt Chandler. By agreement of the parties during the trial, the issues were broadened to include the determination of the amount of compensation to which the defendant Preston is entitled as trustee and the establishment of an equitable lien on the trust property therefor. Mr. Hinkley, an agent of Mr. Preston in the administration of the trust, is joined as a defendant, but the substantial issues are between Mr. Chandler and Mr. Preston. Mr. Nichols’ claim as intervener is based upon a separate agreement between Mr. Preston and himself, by the terms of which he was to receive a certain portion of the compensation which the trust agreement provided for Mr. Preston. Both the plaintiffs and the defendant Preston have appealed from the decree of the circuit judge made after a full hearing of the controversy.
    The principal facts disclosed by the evidence are as follows. In the year 1912, the plaintiff, Merritt Chandler, who resides at Onaway, Presque Isle county, was the owner of large holdings of timber lands and other lands in Presque Isle and Cheboygan counties, also a large farm near Onaway, and a store and other property in that city. From time to time prior thereto, however, he had been borrowing money in considerable amounts, some of it at a high rate of interest, and had also allowed other indebtedness to accumulate against him, with the result that, for some years prior to 1912, the interest on his obligations, the taxes on his lands, and other necessary expenses, had exceeded to a considerable extent the entire income he was able to realize from all sources at his command. His situation had been growing steadily worse until he had reached a point where he was refused further loans and further extensions of those which were maturing; his creditors were pressing him, some of them had taken judgments against him, and others were threatening bankruptcy proceedings. In this emergency he began a search for some person or corporation whom he might induce to take over his property in trust, to advance sufficient money to meet his more urgent indebtedness, and to inspire confidence in his remaining creditors so that they might further extend credit, until sufficient of his property could be disposed of to liquidate his entire indebtedness or reduce it to a point where his remaining possessions could be profitably held. His first efforts in this direction failed, but while he and his attorney* Mr. De-Vere Hall, were returning from an unsuccessful trip to Grand Rapids and Chicago on this errand, they chanced to meet on the train Mr. George E. Nichols, an attorney, of Ionia, to whom they explained the purpose of their journey, with the result that he took up the matter with the defendant, Mr. Thad B. Preston, a business man of Ionia, of large means and wide and diversified business interests, and secured a proposition from him which, on Augut 2, 1912, culminated in a trust arrangement, the details of which were as follows:
    (a) Mr. Chandler (his wife joining) executed to Mr. Preston a trust deed of all his real estate, comprising some 30,000 acres;

      (5) Mr. Chandler also executed a bill of sale to Mr. Preston of all his personal property, except household goods and wearing apparel;
    (c) A trust agreement was entered into between Mr. Chandler and Mr. Preston, which, after certain preliminary recitals, contained the following provisions:
    “It is mutually agreed between the parties hereto as follows:
    “1st. That under and by virtue of the terms of said deed and bill of sale, the second party shall have full power and authority to sell and dispose of any and all of the property, if necessary, of the first party, as trustee, with reasonable dispatch consistent with fair valuations, for the purpose of liquidating the debts, obligations and liabilities, as. hereinbefore stated, but it is understood that no sale shall be made by the second party, as trustee,, without first consulting the first party in regard thereto.
    “2d. That after the payment, adjustment or satisfaction of the debts, liabilities and obligations of the first party and the entire expenses of the trust and any other expenses of executing, carrying out said trust, which expenses shall include those necessary expenses incurred by the trustee, attorney fees, taxes, repairs, improvements, labor, material and other matters or things required to successfully and properly handle and control the business and derive, so far as possible, a revenue therefrom, such property as remains on hand, or in the name of the trustee, shall thereupon be reconveyed to the said first party, or his representatives or assigns, provided, however, that by mutual arrangement in writing between said parties hereto, said trust may be closed before the payment of all the obligations, debts and liabilities of the first party.
    “3d. Said second party shall have five years from the date of this instrument to complete and carry out the terms and conditions of said trust if necessary, but in case the said second party is able to close and complete said trust, or if it is so mutually agreed in writing between the parties hereto, the property conveyed by said deed and bill of sale may be reeonveyed at any time that the parties hereto shall so mutually agree, but in no case as long as any creditors of the first party interested in this trust shall object thereto.
    “4th. The second party is to furnish such sums of money as may be required to pay any and all of the obligations, debts and liabilities of the first party, together with the interest thereon as the same may fall due, or as the creditors of said first party may rightfully demand "payment, and for all such sums advanced the second party is to be paid from out of the assets of said estate six per cent, annual interest while such money so advanced remains in use, and the first party is to execute and deliver his notes payable from time to time bearing six per cent, interest and secured by said trust to the second party for such moneys so advanced.
    “5th. Upon the delivery of said trust deed and bill of sale and this instrument, the second party is to have the full management, control and possession of said property in every way with the right to dispose of the same as he may think best, and to that end the second party is authorized to employ some competent person at an annual salary not exceeding twenty-five hundred ($2,500) dollars a year who shall take active charge of said property and business and who shall consult with first party from time to time in relation to the management and disposition of said estate, and in case of the failure of the first party and said person so in charge of said property to agree upon the disposition and management or control of said estate, or any other matter of dispute, the same shall be referred to and finally determined by second party, whose determination shall be final on all matters.
    “6th. The second party expressly agrees not to permit any property belonging to said estate, or conveyed under said trust instruments, to be sold under any execution or mortgage foreclosure sale for any of the debts, obligations or liabilities of the first party herein mentioned, without the consent of said first party in writing and any violation of this provision shall be deemed a sufficient ground to declare the trust ended, and upon paying to the second party the amount of money that he, at the time of such declaration, has actually advanced, with interest at six per cent, thereon, he shall reconvey all the property held under said trust and surrender the notes given in connection with said trust as compensation for the services of said second party; provided, however, that second party shall have notice of such execution or foreclosure sale for a sufficient time prior thereto to permit him to pay the same and protect the property from the sale.
    “7th. The second party is to pay all taxes upon said property when due and to fully protect the property from being sacrificed in every way, so far as possible* consistent with good management, and manage, operate and control the same in the first party’s interests to the end that after paying his debts, obligations and liabilities, and the compensation to said trustee and the other expenses of said trust, that as much of the property shall be returned to first party as is possible under all the circumstances.
    “8th. The second party, as such trustee, agrees to pay to the first party two hundred ($200) a month for his services in assisting' in the carrying out of the business in connection with said trust, looking after and disposing of the property, which said amount shall be charged to expenses and, if advanced by the second party, he shall be entitled to interest thereon from the time of such advancement until repayment, and it is expressly understood that such employment of the first party by the second party shall and in no way will impair or limit the authority of the second party as trustee as hereinbefore provided.
    “9th. At the time of the delivery of this instrument and said trust deed and bill of sale, or as soon thereafter as reasonable and convenient, the second party, as trustee, shall make a complete inventory of all the property and assets, real and personal, coming into his hands and under his control, and shall deliver a copy thereof to the first party, which inventory shall consist simply of a sufficient description of the property, without valuations attached thereto.
    “10th. The second party shall keep books showing a full and complete statement of the entire trust matters, showing the time when and the amount of all moneys advanced and for what purpose, the amount of disbursements and for what purpose, and the amount of receipts and from what sources, and shall furnish the first party with a statement of the affairs of said trust every ninety (90) days, or oftener, if requested, in writing, and the first party shall have access to such , books at any and all reasonable times.
    “11th. The first party, at the date of this instrument, shall deliver to the second party his notes payable on or before five (5) years from date for the sum of twenty-five thousand ($25,000) dollars, bearing six per cent (6%) interest in such amounts as the second party may desire, and which notes are given as compensation for second party’s services as trustee, and in the management and control of said property, and shall be secured by the said trust and shall be paid before the first party can require the reconveyance of said property, or any part thereof, except as herein-before stated, and said second party, as such trustee, shall thereupon be paid no further sum for such services.
    “12th. It is understood, however, that in the management of the estate, if occasion arises when the first party shall be able to negotiate the sale of any pieces or parcels- of property belonging to said estate advantageously, that he reserves the right to make such sale at prices not less than the inventory valuations as prepared by one E. J. James and dated June 1st, 1912, a copy of which is- in the hands of said trustee, turning the money over to the possession of the said trustee at once, and in case the proposed sale of the property is at an amount less than the inventory valuation, then said sale shall only take place upon the second party’s approval, or the approval of his representative.
    “13th. It is the intention and purpose of this trust that the first party shall place in the hands of the second party as trustee his entire property, to the end that the second party shall pay off all of his liabilities, debts and obligations, but in doing so the second party may sell and dispose of any part or portion of said property, real or personal; that he may encumber the same for the purpose of gaining extensions of time on any obligation; that he may exercise his best judgment as to the best manner and means of achieving the end desired, to wit, the relief of the first party from his present embarrassed condition and turning back to him his property, or so much thereof as shall remain on hand, either free from all obligations and encumbrances, or in such a condition that he shall be able to manage and control the same without the aid and assistance of the second party.
    “14th. To that end and for that purpose the second-party has accepted said trust and agrees with the first party that he will faithfully and honestly and without unnecessary delay, carry out and execute the terms and conditions of this trust in every respect and particular, and, so far as possible, with the consent, approval and approbation of the first party in all things.
    “15th. It is expressly understood that the party of the second part in no wise obligates himself personally to pay any of the debts, obligations or liabilities of the first party beyond the terms and conditions of this trust.”
    The inventory referred to in paragraph 12th of the above agreement as having been made by Mr. E. J. James (who, it appears, was assisted therein by one Jesse Morrill) included 46,632 acres of land, outside of the city property and the so-called “Home farm” or “Allis lands.” It also included the personal property then owned by Mr. Chandler. The “Home farm,” of 927.37 acres, was shown separately, the land being valued at $18,073.70 and the buildings at $19,175.00, total $37,248.70. The aggregate value of Mr. Chandler’s property, as shown by this inventory, was $340,-603.91.
    Immediately upon assuming the trust, Mr. Preston, pursuant to the provisions of paragraph 5th of the agreement, sent Mr. Alexander Robertson to Onaway as his representative. Mr. Robertson at once prepared an inventory of the trust property, the values therein being fixed largely by Mr. Jesse Morrill, who had assisted in the preparation of the “James inventory.” The “Roberton inventory” included 41,097 acres of land, outside of the “Home farm” and the city property, which were shown separately. The personal property was also included. Though less property was shown by this inventory than by the “James inventory,” the total valuation exceeded that of the James inventory by some $84,000, being in exact figures $425,337.72.
    Of the farm lands, some 1,170 acres were cleared, at least partially, though only about 400 acres had been fully cleared so as to be fit for profitable cultivation. The remainder had not been stumped, and much of it had grown up to shrubs and underbrush. A considerable portion of plaintiff’s land was timbered. Upon it were two valuable water powers.
    In the “James inventory,” Mr. Chandler’s liabilities were stated to be $160,304.71 absolute, and $2,150 contingent; in the “Robertson inventory” $114,119.70 absolute, and $1,957.19 contingent; in the recitals of the trust agreement it was estimated at $118,000; the plaintiffs now claim it was only about $113,000,- while defendant computes the actual indebtedness at the date of the trust agreement as about $125,000, aside from the $25,000 in notes given to the defendant for his compensation pursuant to the terms of paragraph 11th of the agreement, and in support of these figures he sets up in his brief a large number of items paid by him, as trustee, of indebtedness incurred prior to the trust, which were not included in Mr. Chandler’s estimate. About $78,000 of the indebtedness was secured by mortgages on portions of plaintiff’s lands.
    Mr. Chandler was 68 years of age when this trust arrangement was made. He had then held most of his lands some 25 or 30 years. He had had a long experience in dealing in lands, had done considerable lumbering, and had developed and carried on the farm referred to. It appears, however, that he was over sanguine, lacked financial judgment, and had exaggerated ideas of the value of his holdings. His farm was well provided with tools and farming implements, well stocked with cattle, and produced large quantities of hay. The testimony was conflicting as to whether it was operated at a profit or a loss. It seems to be conceded that his store at Onaway was losing money. At the commencement of the trust, the annual interest charged against Mr. Chandler was approximately $9,-000, and the annual expense for taxes about $7,000. There was also the expense of insurance upon the farm buildings, dwelling houses and the store block. The trust arrangement added an expense of $2,500 a year for a manager, and required the payment of $200 per month to Mr. Chandler.
    Mr. Preston at once began to advertise for sale the lands embraced in the trust. These advertisements were inserted in newspapers, agricultural journals and magazines, both in English and in foreign languages, not only in Michigan, but in other States, in order to interest prospective purchasers or real estate agents who might assist in disposing of the lands.- He also directly interested a number of real estate agencies in making efforts to effect sales. From the outset there was a disagreement between Mr. Chandler and Mr. Preston in regard to the values of the lands and the prices at which they should be sold, and it is the claim of Mr. Preston that Mr. Chandler’s attitude greatly hindered and embarrassed him in making sales. In a letter written by Mr. Chandler to Mr. Preston on January 2, 1913, he said:
    “Our difference really is in what should be considered a fair price for the land sbld, and if there is a loss resulting from my plan of holding till there is some demand for the land that will make the price better, the loss will fall on me in the end.”
    The amount of land sold by the trustee was comparatively small. During his administration of the trust estate, the trustee received from rents, sales of lumber and timber, sale of the store, sale of farm produce and stock, with other miscellaneous receipts, exclusive of land sales, nearly $98,000. Of the land, he sold altogether (partly in cash sales and partly on land contract) 6,459 acres, besides certain city lots, the prices obtained aggregating about $50,000. In addition, one of the water power properties was sold for $25,000. At the time this suit was instituted, the trustee* held, in the form of land contracts and bonds taken in connection with the above sales, quick assets aggregating about $48,000. It appears from the evidence that, notwithstanding the sales made by the trustee, the annual interest charge and the annual expense for taxes at the time this proceeding was begun were no less than at the commencement of the trust. The total indebtedness of Mr. Chandler’s estate at the time of the filing of the bill herein appears to have been about $122,000 plus the notes for $25,000 given to the trustee for compensation. More than half of this $122,000 was due to Mr. Preston for money advanced to take care of such portions of Mr. Chandler’s indebtedness as had matured, and for which the creditors were pressing for payment.
    Mr. Robertson remained as general manager of the trust estate until April, 1915, when he was succeeded by Mr. Algernon V. Hinkley, who was president of the Onaway State Savings Bank. He remained in charge during the balance of the trust period. Both Mr. Robertson and Mr. Hinkley appear to have been chosen with the approval, if not at the express suggestion and request, of Mr. Chandler. Mr. Preston’s instructions to each of these managers were, to conduct the business economically, to get rid of all unnecessary expense, to sell all the property that could be sold at a fair price, and to obtain for Mr. Chandler full consideration for every dollar of the value of his property, to do nothing that would sacrifice in any way any of Mr. Chandler’s equities or rights, and to consult with Mr. Chandler about everything they did; in case of a difference between them, to refer the matter to Mr. Preston for his decision.
    About six months before the expiration of the trust, Mr. Chandler filed the bill of complaint in this matter and obtained an injunction restraining the trustee from selling or disposing of any more real or personal property. The bill complained that the trustee was wasting the trust property, that he had sold too much of the trust estate and at too low prices, and alleged that he intended to further sacrifice the real estate and personal property of the trust estate in order to obtain money to pay the debts of plaintiff Chandler and the expenses of administering the trust. After a full hearing of the case, the circuit judge filed the following memorandum opinion:
    “It seems to me, in view of the elaborate briefs from counsel, covering every possible phase of the litigation, that a concise statement of my opinion and conclusions upon the law of the case and the facts as I deem them established by the proofs, is more desirable than an extended argument in support of the same. I therefore state such opinion and conclusions as follows:
    “1. Preston was not, either under the spirit or the letter of the trust contract, to devote all, or even the greater part of his personal attention to the administration of the trust.
    “2. Neither was he to pay in the first instance all of the debts and so become the sole creditor of the trust estate.
    “3. He sold all the property that anyone could have sold, and more than Mr. Chandler wished him to sell, at the best possible prices obtainable at the time. Mr. Robertson was a more efficient man, by reason of his experience and qualifications, to manage and push the sale of the lands and other property at home and abroad, and oversee and conduct the business at Onaway, than Mr. Preston. Mr. Preston should not have been removed for failing to sell more.

      “4. He sold the little he did sell for a reasonably fair price, and should not have been removed for selling too low.
    “5. Preston’s failure to redeem from certain foreclosure sales worked no loss to the trust estate.
    “6. No damages should be allowed against the trustee. He has administered the trust with a fair degree of industry and skill.
    “7. The agreement for the compensation of the trustee at $25,000 was made upon a mutual mistake of fact. The fact was that in August, 1912, when this contract was made, and from thence hitherto, there was and has been absolutely no market, in the region where the Chandler lands were situated, for any considerable quantities of land. After extensive advertising and much publicity, mere driblets of the land could be, or were sold, but not nearly enough to pay the overhead expense of the estate. As to this existing, concrete fact both men were mistaken, although it was notorious to others. If it were not that both were mistaken as to this fact, Chandler would not have agreed to pay, and Preston would not have exacted the sum of $25,000. This mistake should annul the agreement to pay $25,000 and only allow the trustee an equitable compensation for his services — say $5,-000, without interest. This may be a novel application of the doctrine that a mutual mistake as to the essential elements, or subject-matter, of a contract avoids the same, but, if sustained, it is a highly equitable one in this case. Besides, it will, perhaps, eliminate the contest between the intervening defendant, Nichols, and the defendant Preston as to the interest upon this sum of $25,000.
    “Mr. Preston has an equitable lien upon the trust property as a security for the money advanced by, or earned by him under the trust contract. These sums as of August 1, 1917, have been ascertained and fixed by the report of the auditor. Any changes made by later transactions will be computed up to the settlement of the final decree. The decree will provide for a liberal, but definite, time for the payment of the amount so found to be due the trustee, and that in default of payment the property be sold as upon foreclosure.”

      The facts connected with the claim of Mr. Nichols, intervening defendant, are as follows: When Mr. Nichols first undertook to find someone to assume the trusteeship W* Mr. Chandler, the latter agreed to pay him $500 for his services, if successful, with the understanding that he might secure such further compensation as he might be able to arrange for from the party he produced. Mr. Preston’s original memorandum of the terms upon which he would accept the trust called for compensation of $25,000, without interest. Mr. Nichols returned to him with a statement of the terms Mr. Chandler would agree to, which provided for compensation of $25,000, with 6% interest. After Mr. Preston had signified his assent thereto, Mr. Nichols suggested that Mr. Preston give him half of the amount of the interest on the $25,000, viz., $3,750, for his services, to which Mr. Preston agreed, and on August 19, 1912, Mr. Preston wrote Mr. Nichols as follows:
    “Yours of the 12th came just as I was leaving for the north. I have received from Merritt Chandler his notes aggregating $25,000 running five years ‘on or before’ with interest payable at 6%. My arrangement with you is that one-half of the interest on these notes when and as paid is to be turned over to you. If the aggregate amount of such interest paid to you on or before five years does not equal $3,750, I am to pay you, but only out of my share of the interest money X receive on said notes, an amount which with what has been paid you shall equal said sum of $3,750.”
    Thereafter, Mr. Nichols promised Mr. DeVere Hall to pay him the first $1,000 that was received from Mr. Preston on this account. In 1913, Mr. Preston paid himself one year’s interest on these notes for $25,000, amounting to $1,500, and he paid over one-half of this, $750, to Mr. Nichols, who in turn paid it over to Mr. DeVere Hall. Sometime in 1913, Mr. Preston sold these notes to third parties to obtain money to use in other enterprises. As trustee, he continued to pay the interest on these notes down to the time of the commencement of these proceedings, the interest being forwarded to the then holders of the notes. He paid nothing further to Mr. Nichols. Mr. Preston’s first knowledge of the agreement between Mr. Nichols and Mr. Hall came in a letter written him by Mr. Nichols May 20, 1915, as follows:
    “I am enclosing a letter from Ray A. Hall, who is executor of the DeVere Hall estate. Under my arrangement with Mr. Hall he was to have $1,000. I paid him the $750 out of the first interest you paid me, and there is. $250 coming to the estate. He has written me two or three times about it. Is there any way the matter can be fixed up? I don’t feel that I should be called upon to advance the money, and I didn’t know but what the matter now was in a situation where you could pay the $750 due me last July. Anyway, if you cannot do that, kindly write me a letter as to the conditions so I may send it to Mr. Hall and satisfy him that so far as I am concerned I am doing all that can be done and not retaining any money due the estate.” *

    In his argument on this appeal plaintiff seems to have abandoned his position that the trustee was wasting the trust property by sacrificing same to raise money to pay off the indebtedness, and now states his complaint as follows:
    “Aside from the obligation to deal honestly and faithfully, which is the basis of every trust, the terms of the trust required him to pay off the indebtedness from the property and proceeds and meanwhile to furnish any funds necessary to discharge at maturity all debts and to protect the property against loss. The property did not and could not produce revenue sufficient to meet more than a fraction of the fixed charges for interest and taxes and the expense of administration. The obviously proper course, the only possible method of accomplishing the ends of the trust was to effect sales, even at a sacrifice, of enough of the property to pay off the indebtedness or of at least reducing it to such a point that the ordinafy revenues would meet fixed charges. While the trustee was not required to guarantee such results, he must have understood at the outset that success or failure depended upon his devising and carrying out a policy that would accomplish them. * * *
    “Mr. Chandler was visionary and impracticable, optimistic and trusting. Mr. Preston was of a different type. He foresaw the inevitable end from the beginning. What was his duty considering the power with which he was vested and the situation as he saw it? Plainly to disregard Chandler’s opinions, which he knew were wrong, and act on his own judgment, which was (notwithstanding his attempted qualification of his admission) that property should be sold until the debts were reduced to manageable proportions.
    “To effect this, instead of treating every sale as a proposition by itself, referring purchasers to Chandler or delaying the sale to overcome his objections and thereby risking its loss, the obviously proper course was, at the outset of the business after a full discussion with Mr. Chandler, to determine once and for all a general schedule of prices such as the trustee’s judgment should approve. This was the trustee’s eapital duty and this he never did.”

    Plaintiff summarizes his grounds of appeal as follows:
    “1. In the formation of the trust, Mr. Preston, having first offered to one of Mr. Chandler’s attorneys to take in full compensation for his services $25,000, payable in five years at the expiration of the trust without interest, afterwards bargained with this attorney (Mr. Chandler being ignorant both of Preston’s original offer to forego interest and of this bargain) for an increase of that compensation by the addition of interest, and for a division of the excess between himself and the attorney.
    “2. The trustee failed at the outset to frame any proper policy for the management and sale of the trust property, failed to give the trust proper attention and management, paid unnecessary interest, failed to carry out his obligation to refund matured indebtedness at lower interest, all with the design of preventing a reduction of indebtedness, to the end that he himself might acquire the trust property for the amount of the liens.”
   Kuhn, J.

(after stating the facts). 1. The relation of trustee and cestui que trust between Mr. Preston and Mr. Chandler began with the execution of the trust deed and agreement. During the preliminary negotiations no such relation existed. The parties were strangers to each other, and were dealing at arm’s length. Mr. Preston was under no obligation whatever to assume the trust, and the only appeal the proposition had for him was from the standpoint of a business venture. It involved some risk on his part. The essential feature of the transaction was his agreement to finance the trust estate for the period of five years, which, under adverse conditions, would require the furnishing of an indefinitely large sum of money. And this was of the utmost importance to Mr. Chandler. What the consequences to him might have been had he been unable to find anyone with both the ability and the willingness to render this assistance, it is impossible to estimate. It is clear, therefore, not only that Mr. Preston had the right in the first instance to demand such compensation as would make it worth while for him to undertake the risks and burden of this unusual trust arrangement, but also that at any time prior to the acceptance of his terms, he had the right to revoke or alter his proposition, and in doing so to increase his demand for compensation, if, upon reflection, he was dissatisfied with his first figure. Had he received an intimation from any outside source that Mr. Chandler was willing to pay a larger compensation than that suggested in Mr. Preston’s proposal, Mr. Preston clearly would have had a legal right to withdraw his offer and to submit a new one naming a larger sum. The fact that his information came through Mr. Chandler’s agent does not alter the situation in point of law. Mr. Preston was still under no obligation to enter into the transaction at all. Mr. Chandler, instead of accepting Mr. Preston’s offer, had made a counter-proposition embodying several new features, among others an agreement on the trustee’s part to pay Mr. Chandler $200 a month during the entire five-year period. Up to the moment of acceptance, therefore, Mr. Preston was free to do as he pleased and to insist upon such terms as he pleased. The provision for the payment of interest on the $25,-000 which Mr. Preston was to receive as compensation was embodied in this counter-proposition of Mr. Chandler’s. There is no merit to plaintiffs’ contention that Mr. Preston’s acceptance of this offer was, under the circumstances, a breach of trust and a fraud upon the beneficiary.

2. After a careful reading of the testimony, we have reached the conclusion that the plaintiffs’ second contention is also unfounded. We agree with the trial judge that Mr. Preston administered the trust with a fair degree of industry and skill, that he sold all the property anyone could have sold, and more than Mr. Chandler wished him to sell, and that he obtained reasonably fair prices for the property sold and the best prices obtainable at the time. Under all the circumstances of the case, we do not think he is open to criticism either for selling at too low prices, as urged in plaintiff’s bill, or for not making greater sacrifice of the trust property in order to reduce the indebtedness and diminish the interest and taxes, as plaintiffs urge so strongly on this appeal. We think it also clearly appears that both Mr. Robertson and Mr. Hinkley were competent managers.

3. The trial judge was in error in holding that the agreement fixing the compensation of the trustee at $25,000 was made under a mutual mistake of fact. The salability of land during a period of five years in the future is not an existing fact. Most purchases and sales are based upon the judgment of the parties as to future value. A mistake in judgment in that regard is no ground for the relief of either party. 1 Black on Rescission and Cancellation, § 146; Parke v. City of Boston, 175 Mass. 464 (56 N. E. 718); DuBois Borough v. Water Works Co., 176 Pa. 430 (35 Atl. 248, 34 L. R. A. 92); Taylor v. Ford, 131 Cal. 440 (63 Pac. 770); Chicago, etc., R. Co. v. Wilcox, 116 Fed. 913, 54 C. C. A. 147. What we have said above as to the value of Mr. Preston’s services to Mr. Chandler is pertinent in this connection also. We think the trustee was entitled to his compensation as agreed.

4. We agree with the contention of plaintiffs.’ counsel as to the construction of the 4th paragraph of the trust agreement, above set forth. It clearly refers to two classes of indebtedness, and by its terms Mr. Preston was to take up indebtedness of fixed maturity when it became due, and indebtedness due upon demand when demand was made. All of the mortgages upon Mr. Chandler’s property matured on fixed dates. They bore interest at 7%, payable semi-annually. The holders of these mortgages, however, were willing to let them run after maturity. Mr. Preston interpreted-the contract to mean that he was not obliged to take up indebtedness of any kind until the creditor insisted upon payment, and accordingly did not take up such of these mortgages as became due. The trustee should, therefore, be charged in the accounting with the further amount of $2,884.67, being the interest in excess of 6% paid on the overdue mortgages after maturity.

5. We are of the opinion that by virtue of section 11, chapter 12, of Act No. 314, Public Acts of 1915 (3 Comp. Laws 1915, § 12362), the defendant Nichols had such an interest in the subject-matter of the litigation as would give him the right to intervene, in accordance with the holding of this court in Weatherby v. Kent Circuit Judge, 194 Mich. 46; McMillan v. School District, 200 Mich. 280; and Detroit, etc., Loan Ass’n v. Oram, 200 Mich. 485. It appears clearly that his interest in the subject-matter is of such a direct and immediate character that he will either gain or lose by the direct legal operation and effect of the decree of this court determining the right of the defendant Preston to recover for his services in accordance with his contract.

We are satisfied from this record that Nichols was acting as a go-between. In the first instance he was acting for Chandler, with the understanding that he might get such further compensation as he could from Preston. Preston was apparently willing to accept his services and agreed, as the record conclusively shows, to pay him for obtaining the contract which was finally executed and by which he receives the compensation which he demanded and was agreed upon. So far as Mr. Preston is concerned, it does not make much difference whether his contract was more favorable to him, as he claims, than if he had dealt directly with Chandler. Mr. Chandler did not testify with reference to this phase of the case and makes no complaint about it. We are impressed, on reading the testimony, that as by this opinion the contract entered into between the parties is sustained, in equity and justice likewise the claim of Mr. Nichols should be sustained for the services which he rendered for Mr. Preston and for which Mr. Preston agreed to pay. We think the record is convincing, by reading the testimony of Mr. Nichols, that he dealt fairly with both parties to the transaction, and under the well established rules of law, where the principals have ■knowledge of the fact that the agent is acting in a dual capacity and, with such knowledge, assent to his so doing, he may recover for his services from either party. See 1 Am. & Eng. Enc. Law (2d Ed.), p. 1074; 2 Corpus Juris, p. 713; Adams Mining Co. v. Senter, 26 Mich. 73; Colwell v. Keystone Iron Co., 36 Mich. 51; Aldine Manfg. Co. v. Phillips, 129 Mich. 243. The decree herein should provide that the intervener, Nichols, be paid by the defendant Preston the balance due him for his services, in accordance with the agreement made between the parties, with interest at 5% on sums received by Preston from the date such sums were thus received.

The decree of the lower court, as herein modified, will be affirmed, without costs to any of the parties' hereto.

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

The late Justice Ostrander took no part in this decision.


source: Caselaw Access Project

author: Brooke, J.

license: Public Domain

text:
    INTERSTATE CONSTRUCTION CO. v. UNITED STATES FIDELITY & GUARANTY CO.
    1. Contracts — Construction — Several Instruments Construed Together.
    Where several instruments are made at one and tbe same time having relation to tbe same subject-matter they must be taken to be parts of one transaction and construed together for tbe purpose of showing tbe true contract between tbe parties.
    2. Same — Breach of Contract — Evidence—Admissibility.
    In an action for damages by tbe general contractor on a public building against a subcontractor for breach of contract in refusing to perform on tbe ground that plaintiff’s delay until July 17th in having the building ready for defendants to begin work amounted to a breach thereof, a telegram from plaintiff to defendants bearing the same date as the contract stating that “you are to start work about May 1st,” held, admissible for the purpose of showing the true contract between the parties, although the contract provided that the work should be “commenced promptly upon notice.”
    3. Same.
    Where the evidence clearly shows that plaintiff’s agent notified defendants that it was expected work would begin about May 1st, the admission of the telegram, whether admissible or not, held, not prejudicial.
    4. Same — Breach—Burden of Proof.
    In order to justify defendants’ refusal to perform, the burden was upon them to establish, by a fair preponderance of the evidence, that the neglect of plaintiff was so unjustifiable, unreasonable, and inexcusable as to amount to a breach of the contract.
    6. Same — Changed Conditions — Admissibility.
    Defendants having elected to repudiate the contract, claiming a breach, evidence of the changed condition of the labor market in the meantime, which would have imposed upon them an extraordinary and unwarranted burden, held, admissible.
    6. Trial — Instructions—Requests to Charge.
    It was not error for the court below to refuse plaintiff’s specific requests to charge, where the charge as given fully protected his rights, and all proper requests were either given or covered.
    7. Same — Remarks of Counsel.
    A ruling of the court below sustaining appellant’s objection to remarks of counsel, and adding “I do not think that makes any difference and need not be considered by the jury,” held, not reversible error.
    Error to Wayne; Shepherd, J., presiding.
    Submitted April 29, 1919.
    (Docket No. 14.)
    Decided October 6, 1919.
    Assumpsit by the Interstate Construction Company, Limited, against the United States Fidelity & Guaranty Company and others on a bond. Judgment for defendants. Plaintiff brings error.
    Affirmed.

      Watson, Safford & Shepherd (Frank T. Lodge, of counsel), for appellant.

      Douglas, Earnan, Barbour & Rogers (Lewis W. Mc-Candless, of counsel), for appellees.
    Plaintiff as general contractor had entered into a contract with the United States for the erection of a post office building at Franklin, La. On April 22, 1913, plaintiff entered into a sub-contract with defendants Montagne, by .the terms of which said defendants agreed to furnish:
    “All of the labor and do and perform all the work required in constructing and putting in place the mortar and concrete, stone work, brick work, structural terra cotta, metal work, roofing and sheet metal work, plastering, interior marble and terazzo, wood work, hardware, painting and varnishing, glazing, plumbing marble work and terazzo floors for toilet rooms, under the head of plumbing, and approaches. All the material to be furnished by the party of the first part delivered on the site, party of the first part will also permit the second party to use any tools and apparatus which are owned by the first party and on the premises. * * *
    “This contract is to include all labor to complete this building and approach walk except, pile driving and main building excavation labor and labor in connection with mechanical equipment, but includes marble setting, terazzo floor labor and carpenter labor in toilet rooms in connection with mechanical equipment.”
    Section 2 of the contract follows:
    “And the said party of the second part further covenants and agrees that the labor and material and the work herein agreed to be performed shall be commenced promptly upon notice from first party to said second party, that the said building and premises are ready for the installation of the above mentioned labor, materials and work, and that the same shall be carried on in the order and manner as provided in said specifications and with such dispatch and in such manner as to not cause undue delay to other work on said building, and in such a manner as shall insure the completion of said work in all its parts by November 1, 1913. And it is expressly covenanted and agreed by and between the parties hereto that time is and shall be considered as of the essence of the contract on the part of the second party, and in the event that the second party shall fail in the due performance of the entire work to be performed under this contract, by and at the time herein mentioned or referred to, the said second party shall pay unto the first party as and for liquidated damages, and not as a penalty, the sum of forty ($40.00) dollars for each and every day the said second party shall' be in default, which said sum the said first party shall have the right to deduct from any moneys in its hands otherwise due or to become due, to said second party, or to 'sue for and recover compensation or damages for the nonperformance of this contract at the time or times herein stipulated or provided for. Provided, however, that for any delay to second party which shall be caused by the first party’s action or order, or by the order of the said supervising architect, the time fixed for the final completion of the work herein provided shall be extended for as many days as shall equal the delay caused to second party by any of the reasons above mentioned.”
    On the day of the date of the contract the following telegram was sent by plaintiff to defendants Montagne Brothers:
    (Dated April 22, 1913.)
    “Piles completed, if you include putting in foundations no excavating will send contracts for sixty-five hundred to our representative at Franklin and you can sign up there, you to start work about May first.
    “Answer.”
    To which upon the same day Montagne Brothers replied as follows:

      “We accept your offer for Sixty Five Hundred Dollars. Send contracts.
    “Montagne Bros.”
    Prior to the execution of the contract one of the defendants, R. Montagne, inspected the site, saw the condition of the work and testified that he was informed by plaintiff’s superintendent that the piling was completed and that he could probably go to work in two or three days. Plaintiff’s contract with the government, however, required that certain tests be made upon the piling before the superstructure was started. Those tests were made after some delay and resulted in an order from the government requiring plaintiff to drive some further piles. These piles were driven by plaintiff as required but the piling was not finally accepted by the government until July 10th. On July 17th plaintiff sent defendants Montagne the following communication:
    “The above named building is now in such shape so you can make arrangements to start your work, and would suggest that you get your batter boards located and arrangements made for your tools and men so you can start pouring concrete about Monday, July 21st, and as your contract calls for all labor to be performed by you with the exceptions of the piling and excavation, it is part of your contract to screen the cement now in the shed before using it, also the removing of the rust from the reinforcing rods all to be done as directed by Mr. Clark, the government inspector.
    “The writer will send you a complete list of all the materials and tools now on the site to be taken from the company’s books and invoices upon his return to Saginaw, Mich., which you can check up as soon as it reaches you and give us a receipt for same; in the meantime such cement, sand, and gravel can be used to allow you to proceed with the work without delay. All new materials to be delivered to the site you are to be responsible for, and give us a receipt for same upon its arrival; you are also to be responsible [for] all tools and material now on the site as soon as they are checked up and delivered to you. We are,”
    Defendants Montagne in response sent the following notice to plaintiff:
    “This is to inform you that on account of the great delay of time caused by your not being ready to turn the building work over to us, after your telegram of April 22d, 1913, confirmed by your letter of same date stating that work was to be started by us about May 1st, 1913, it will be absolutely impossible for us to complete the work in the time specified in the contract and unless certain changes are made in the contract, we will be unable to begin the work.
    “There are certain stipulations in' the contract which,' not being lived up to by you, certainly annuls same, and we would suggest that your representative call on us at once, and see what can be done with reference to getting the matter straightened out.”
    This was followed on July 19th with a formal cancellation of the contract as follows:
    “Please take notice that the contract entered into between you and Montagne Brothers, on April 22, 1913, has expired and is at an end. The contract terminated when you failed to live up to its specifications and to the agreements made by you. As soon as we check up and see what damages we have been put to, claim will be made.”
    To which plaintiff replied on the same day:
    “In this connection will say that we have lived up to our part of the contract to the letter, and expect you to do the same, and unless you proceed in accordance therewith, in accordance with the terms, conditions of contract and the plans and specifications, it is our intention to give you the five days’ notice in accordance with contract, and if you do not proceed it is our intention to notify your bonding company, and will make a demand upon them to complete your contract.
    “Hoping that you will not make it necessary to proceed against your bonding company, as outlined above, we are,”

      No accommodation between the parties having been reached, plaintiff was compelled under its contract with the government to perform through other channels the labor which the defendants Montagne had by their contract agreed to perform. Suit was brought against Montagne Brothers and the defendant United States Fidelity & Guaranty Company, as bondsmen, for damages arising out of the breach of contract. No service was had on defendants Montagne. The defendant Guaranty Co. filed a plea of the general issue giving notice of the following defenses thereunder:
    “(a) The said Interstate Construction Company did notify Montagne Brothers to begin work in accordance with said contract on or about May 1st, 1913, and in accordance with the said contract and the said notice, Montagne Brothers did prepare for the due execution on their part of said contract, did in turn enter into contracts with various parties to enable them to fulfill the said contract, but up to and including the date when they elected not to be bound further by said contract, no opportunity on the part of the said plaintiff had been given to said Montagne Brothers to proceed with the work, but on the contrary through the fault of the said plaintiff they were prevented from fulfilling the contract sued upon.
    “(6) The said plaintiff did not provide proper materials upon which work was to be done, as provided in said contract.
    “(e) That through the unreasonable delay on the part of said plaintiff in fulfilling its part of the contract and in enabling said Montagne Brothers to proceed with their part of the contract, causing an unreasonable delay in the execution of said contract through no fault of the said Montagne Brothers, and that on account of said unreasonable delay said Montagne Brothers had a right to rescind the said con-< tract sued upon.
    “(d) That said Montagne Brothers, subsequent to April 22d, 1913, did repeatedly request of the said plaintiff an opportunity to fulfill their part of said contract; that they were always ready, able and willing to fulfill their part of said contract, but through the neglect and unreasonable delay of this plaintiff, were prevented from fulfilling their part of the contract, and had the right thereby to rescind the said contract.

      “(e) That the said plaintiff, because of its failure to furnish materials, to prepare the excavations and piling necessary to be done before the said Montagne Bros, could proceed duly with their work, made it impossible for the said Montagne Brothers to perform their said contract.
    “ (/) That because of the unreasonable delay on the part of the plaintiff in fulfilling its part of said contract and because of the unreasonable delay which the said plaintiff caused the said Montagne Brothers in the fulfillment of their contract, the said Montagne Brothers did have a right to rescind the said contract and consider the same at an end.

      “(g) That a material provision of said contract sued upon subjected the said Montagne Brothers to a penalty in the sum of Forty Dollars ($40.00) per day from and after November 1st, 1913, provided the obligations on the part of the said Montagne Brothers were not fulfilled upon that date, and yet without any waiver of said provision and being a material part of said contract, the plaintiff further, by its unreasonable delay in preventing the said Montagne Brothers from fulfilling their part of said contract, did justify the said Montagne Brothers in rescinding the contract and treating it as at an end, and were thereby relieved from any obligations imposed by said contract.

      “(h) That the said contract did specify and provide a time certain for the completion of the obligations of said Montagne Brothers, and yet through the unreasonable delay 'on the part of the plaintiffs did make it impossible for the said Montagne Brothers to fulfill their obligations within the time specified.

      “(i) That the said contract sued upon presupposed an opportunity for due and diligent execution on the part of said Montagne Brothers of their obligations under said contract, and yet, through the fault of the said plaintiff and because of the delay due entirely to the fault of the said plaintiff, the said right of Montagne Brothers was deprived them wrongfully by said plaintiff, thereby fully justifying them in rescinding the said contract and treating it as at an end.”

      The case was tried at considerable length and submitted to the jury under an exhaustive charge in which we find the following:
    “Under the well settled principles of law applicable to contracts of this character, I charge you that when the defendants, Montagne Brothers, contracted to do and perform the labor referred to in said contract, under the terms and conditions therein set forth, they were bound to make it good, regardless of the cost or difficulty to them in so doing, unless you should find that they were excused from performance by reason of unreasonable and unjustifiable delays on the part of the plaintiffs in the case, which amounted to an actual breach of the contract on their part, and in this class of case§ I charge you that the mere delay complained of is not in itself sufficient to justify the defendants, Montagne Brothers, in refusing to 'perform the contract, and before they can claim the right to be set free they must satisfy you as I have already told you in effect by a fair preponderance of evidence, that the action of the plaintiffs, independent, of other contributing causes, occasioned such an unreasonable delay as to impose a material and unnecessary burden upon the Montagne Brothers.”
    The jury returned a verdict in favor of the defendants. A motion for the entry of judgment in favor of the plaintiff notwithstanding the verdict was later denied and judgment rendered for defendants upon the verdict.
   Brooke, J.

(after stating the facts). Counsel for appellant review the case in this court under a large number of assignments of error, grouped as follows:

(1) Erroneous admission and exclusion of testimony and evidence.

_ (2) Erroneous instructions to the jury and refusals to charge as requested.

(3) Refusal to direct verdict for the plaintiff.

(4) Was the plaintiff prejudiced by certain remarks. of counsel?

These will be considered in their order.

1. Under this head there are many assignments of error, but in oral argument only two were discussed. Those only will be considered as we are satisfied that the others are without merit.

a. It is asserted first that it was prejudicial error for the court to admit in evidence the telegram of April 22d. This telegram contained the language:

“You to start work about May 1st.”

It is the contention of plaintiff that inasmuch as the formal contract provided that work by the subcontractors thereunder should be “commenced promptly upon notice,” the admission of the telegram in question was a violation of the rule that all antecedent negotiations must be held to be covered by the contract itself. In this connection it is to be noticed that the telegram and contract bear the same date, April 22, 1913; both were transmitted upon the same day, the contract by mail through Constantine, plaintiff’s agent, and the telegram directly. Both papers had reference to the same subject-matter and were parts of a single transaction and both may be examined for the purpose of ascertaining the agreement of the parties. That agreement would appear to be that the subcontractor should commence work promptly upon notice as stated in the contract and,—

“about May 1st, as explained in the telegram.”

There seems to be no question that where several instruments are made at one and the same time having relation to the same subject-matter they must be taken to be parts of one transaction and construed together for the purpose of showing the true contract between the parties. Sutton v. Beckwith, 68 Mich. 303; Singer Manfg. Co. v. Haines, 36 Mich. 385. See, also, Gould v. Magnolia Metal Co., 207 Ill. 172 (69 N. E. 896). We are of opinion that the telegram in question was admissible in evidence, but, whether admissible or not, its admission was apparently not harmful to plaintiff because the evidence clearly shows that the plaintiff expected and intended that defendants Montagne Brothers should commence the work about May 1st and that defendants were so notified by Constantine, plaintiff’s agent, on or about April 25, 1913. The ultimate fact having been abundantly proven by evidence dehors the telegram, its admission cannot have been prejudicial to plaintiff.

5. Defendants were permitted over objection to introduce evidence tending to show that labor in the vicinity of Franklin was comparatively cheap and plentiful during the spring and summer but that it was scarce and high during the fall and winter by reason of the fact that during the latter period the sugar campaign was on in that region, affording employment at good wages to large numbers of men. In this connection it should be borne in mind that defendants claimed the right to refuse performance of the contract by reason of the unwarranted and unreasonable delay on the part of plaintiff, which delay, had defendants performed, would have imposed upon defendants a material and unnecessary burden. This question was submitted to the jury by the court under an instruction that in order to justify the subcontractor’s refusal to perform the contract defendants must establish—

“by a fair preponderance of the evidence in the case that the delays complained of due solely to the acts or neglect of the plaintiff, were so unjustifiable and unreasonable and inexcusable as to amount to a breach of the sub-contract on plaintiff’s part,”

—and in this connection the court refused to instruct the jury as requested by plaintiff that in order to excuse the defendants from performance the delay must be—

“such an unreasonable delay as to amount to an intimation of an intention to .abandon and altogether refuse performance.”

The court, however, did instruct the jury that the delay must have been—

“such an unreasonable delay as to impose a material and unnecessary burden upon the Montagne Brothers.”

The record shows conclusively that it was within the contemplation of all the parties that the work to be performed by the defendants under the sub-contract was to commence within a reasonable time after May 1st. It further shows that defendants prepared, at considerable expense, to commence performance shortly after that date. A delay of nearly three months ensued on account of plaintiffs failure to get the piling and foundation in proper shape to permit defendants to undertake the performance of their part of the contract. In the meantime labor conditions had materially changed or would change before it would be possible for the defendants to complete. Having elected to repudiate the contract, by reason of the antecedent breach thereof by the plaintiff we think it was competent for defendants to show that performance thereof under the changed conditions occasioned by the unwarranted delay would have imposed upon them an extraordinary and unwarranted burden.

2. It is asserted by counsel for plaintiff that the court erred in refusing certain requests to charge and in the charge as given. Plaintiffs argument under this head is based in part, perhaps mainly, upon the refusal of the court to charge that plaintiff's delay was—

“such an unreasonable delay as to amount to an intimation of intention to abandon and altogether refuse performance,”

—and the case of West v. Bechtel, 125 Mich. 144 (51 L. R. A. 791) is cited in support. In that case the court considered the effect upon the contract of the failure of one party thereto to make payments on account of partial deliveries in accordance with its terms. It is, we think, clear that plaintiff was under obligation to do the pile driving, pit digging, and pile cutting before defendants were obliged to perform the part of the work covered by their contract. In other words, the performance of that part of the work to be performed by the plaintiff was a condition precedent to the undertaking of the performance of defendants’ work. This obligation rested upon plaintiff as certainly as though it had been so definitely expressed in the contract. Allamon v. Mayor of Albany, 43 Barb. (N. Y.) 33; Black v. Woodrow, 39 Md. 194; Morier v. Moran, 58 Ill. App. 235. A careful perusal of the charge in its entirety, and it must be so read, convinces us that plaintiff’s rights were fully protected and all proper requests either given or covered therein.

3. Our conclusions reached under 2 dispose of the assignments of error under this head.

4. An examination of the evidence upon which assignments of error under this head are based indicates that when appealed to the court held with counsel for plaintiff; in one instance saying:

“The objection is sustained. I do not think that makes any difference and need not be considered by the jury.”

We find no reversible error in the conduct of the trial in this respect.

The judgment is affirmed.

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

The late Justice Ostrander took no part in this decision.


author: Steere, J.

text:
    BENNETT v. FLEMING.
    1. Pleading — Amendment Nunc Pro Tunc — Judicature Act — Furtherance of Justice.
    Where a chancery cause was brought on to be heard in open court, without objection by either party, upon the supposition and theory by both court and counsel that the pleadings were perfected and the cause at issue as to all parties, but it was discovered after conclusion of the proofs and submission of the case that it was not In fact at issue as to all parties, the court was authorized under section 1, chap. 16 of the judicature act (3 Comp. Laws 1915, § 12478), to grant a motion perfecting the pleadings nunc pro tunc, where no new elements or issues were brought into the case, and was for the furtherance of justice.
    2. Cancellation of Instruments — Deeds—Inadequate Consideration — Undue Influence.
    Evidence that the grantor, 74 years of age, in the last stages of tuberculosis, physically and mentally weakened, deeded his entire property to a stranger ip blood at whose house he was a guest, although he was on good terms with his family, for the claimed consideration of support for life, etc., which was left in parol, held, in view of the very brief life expectancy of grantor, to support the conclusion of the court below that the deed was not only inequitable because for a grossly Inadequate consideration, but was the result of undue influence.
    Authorities discussing the question of undue influence in conveyance or transfer of property in consideration of support of grantor or third person are collated in a note in 52 L. R. A. (N. S.) 477.
    Appeal from Tuscola; Beach, J.
    Submitted April 10, 1919.
    (Docket No. 81.)
    Decided October 6, 1919.
    Bill by George T. Bennett against Caroline Fleming and others to correct a description in a deed. Defendants filed cross-bills to have said deed set aside. From a decree for defendants, plaintiff appeals.
    Affirmed.

      Herbert W. Smith, for plaintiff.

      Quinn, Wixson & Quinn (Walter S. Wixson, of counsel), for defendants.
   Steere, J.

On April 19, 1915, Alfred Newton, of Gilford, Tuscola county, Michigan, deeded to plaintiff, George T. Bennett, of Attica, Lapeer county, Michigan, by short form warranty deed, “In consideration of one dollar and other valuable consideration dollars,” property described in said deed as the “northwest quarter of the northwest fractional quarter of section two (2), town thirteen (13), north range seven (7) east, forty acres more or less.” This instrument was recorded in the office of the register of deeds of Tuscola county on April 20, 1915.

Alfred Newton was a widower, then' 74 years of age and in poor health. He died intestate at the home of plaintiff on April 30, 1915, eleven days after making said deed. Defendants are his sons and daughters surviving and heirs at law.

On May 11, 1916, plaintiff filed this bill to obtain correction of the description in said deed, alleging that by mistake of the scrivener who prepared the same the premises intended to be conveyed were not correctly described therein, the true description being “the east one-half of the west half of the northwest quarter of section two (2), in town thirteen (13), north of range seven (7) east thereof,” the same being what is called a “long forty” instead of a square forty. The bill also alleges that “the other valuable considerations mentioned” in the deed were an agreement by plaintiff, the grantee, “to maintain and support said Alfred Newton in his home, at the township of Attica, Lapeer county, Michigan, during his natural life * * * pay his doctor’s bills and to furnish the said Alfred Newton with a decent burial.” That said Alfred Newton was to retain possession of said premises during his natural life.

Defendant Southerland filed an answer on November 21, 1916, asking no affirmative relief, and defendants Arthur, Milton, Abram and Frederick Newton filed an answer on April 19,1917, in denial and asking as affirmative relief by way of cross-bill, that said deed be set aside.

On May 23, 1917, the cause was brought on to be heard upon pleadings and proofs taken in open court, before the circuit court of Tuscola county, in chancery, without objection by either party and, as stated by the circuit judge in his findings, upon the supposition and theory both by court and counsel that the pleadings were perfected and the cause at issue as to all parties:

“That said proofs were taken and all witnesses in said cause examined by counsel for both plaintiff and defendants, and the hearing thereof by the court conducted upon the theory that the sole issues for determination thereunder were:
“(a) Whether plaintiff was entitled to decree of reformation, as in the bill of complaint prayed; or,
“(b) Whether the deed sought to be reformed should be set aside as affirmative relief to defendants.”

It was discovered from an examination of the files after conclusion of the proofs and submission of the case that it was not in fact at issue as to all parties, an amended answer and cross-bill of defendant Southerland and answer and cross-bill of defendants Fleming and Johnson prepared by Attorney T. C. Quinn, deceased some time before, never having been filed. Previous to his death he had sole charge of the defense, and the surviving members of the firm as well as the court and opposing counsel apparently labored under a misapprehension as to the true condition of the pleadings until after the case was submitted. A motion was then made by defendants’ counsel for leave to file these answers, which were to the same effect as those filed by the other defendants, and perfect the pleadings nunc pro tunc as of May 1, 1917. Finding that such course brought no new elements or issues into the case, and was for the furtherance of justice, the court granted this motion. No showing, or claim, is made for plaintiff that further proof or time was desired, or the issue as understood and tried on the hearing was changed, or his substantial rights on the merits of the case prejudiced in any particular. Under the situation shown, the course pursued was fully authorized by section 1 of chapter 16 of the judicature act (3 Comp. Laws 1915, § 12478).

Alfred Newton had been a widower for many years. For a time after tiie death of his wife his youngest daughter kept house for him until she was married, eleven years before his death, after which he lived alone at times in his own home and at other times with some of his children. His children all married and were in homes of their own. Caroline Fleming lived in Flint and Arthur Newton in Pontiac, Michigan. Elizabeth Johnson lived with her husband who was a farmer, in Gilford township, Tuscola county, where deceased bought a farm of 80 acres in January, 1910, to be near his daughter; their places were about a mile apart and while he lived alone much of the time on his own place they were “back and forth” every few days and he was in closer touch with this daughter and her family than the others. He was, however, on friendly terms and corresponded with all his children. He had lived at different times at the home of each of his three daughters — spending entire winters with them. Four of his children resided in California and he had visited them, spending a winter there. For some years he had been in declining health, for relief of which he had doctored and sought relief by change of climate in the west and south. He had sold off one-half of this 80-acre farm and the 40 remaining was all the property he possessed. It was valued at about $3,000 and had upon it a mortgage of $375. He leased portions of this 40 to his son-in-law and others. He and plaintiff were old acquaintances and friends who had worked together in their younger days and had occasionally visited each other since. Deceased visited plaintiff once or twice a year for many years. During a portion of the winter prior to making this conveyance he had been in Georgia for his health, which was steadily declining, his condition being such that for over, six months he had not been able to eat solid food. On his return in March he was at the home of Mrs. Fleming in Flint for a time and then at the home of Mrs. Johnson, from where he went to Bay City to try Christian Science treatment. Mrs. Johnson visited him there once, for but a short time, as she was informed that, being an unbeliever, her presence had a bad influence on his mind. On April 16,1915, he left Bay City without advising any members of his family and traveled to Attica in Lapeer county. When he arrived there an acquaintance who helped him carry his grip into the station noticed he appeared feeble and had a chill. He said, in reply to an inquiry, that he did not think he could walk from the station to Bennett’s, some 40 to 50 rods away, and was taken over there by an acquaintance. His condition was then such that Bennett, who testified “he was somewhat feeble and had a serious and very annoying cough,” called a physician for him. During the first week he slept in the house with Bennett. Three days after his arrival ■ Bennett took him to Lapeer to execute the deed in question; Dr. Blakely, the physician called by Bennett, testified that he cared for and treated deceased until his death, prescribing fresh air, rest and wholesome food; that he “seemed to feel the cold terribly — had a species of tuberculosis — had a bad hacking cough,” and he directed Bennett to get a tent for him, which was done; that “after he was put in the tent he gradually declined, at the last he grew rapidly worse”; that he visited him seven times, furnishing medicine twice. As to the doctor’s views upon his patient’s life expectancy, he was asked and answered as follows:

“Q. You regarded him as having been at the point of death from the start?
“A. Not from the start, no.
“Q. How long before you regarded him so?
“A. Just before he was placed in the tent.”

No word was received of deceased’s serious condition by any of his family until after his death when a telephone message was orally communicated to Mrs. Johnson to the effect that there was a death message for her and “they want you at Attica.” She and Mrs: Fleming, of Flint, who had received a similar message, responded at once, arriving at Attica that night, where they were met by Bennett who told them their father had passed away and they had laid him out in a casket. He took them to his house where they had supper and on one of them asking to see their father’s remains he lit a lantern and took them to a tent in the back yard where the body was laid out. He explained to them that the doctor had advised a tent for their father, and he had provided one for him about a week before he died. Mrs. Fleming testified that in a conversation upon that subject:

“I asked him — I says ‘How did you come to get pa to sleep in a tent?’ I says, ‘When he was to my place we had to have a hot fire for him — right by the stove?’ ‘My,’ he says, ‘your father always did as I wanted him, he would do anything I wanted him to do.’ ”

These two daughters testified in substance that while they were there Bennett told them their father had given him a warranty deed of his place under which, if so disposed, he “could hold the whole thing,” but he'had no thought of so doing as it was in effect a trust deed, the understanding with their father being that Bennett should sell the property, take out of the proceeds his own charges for care and burial, give $200 to deceased’s grandson, “little Alfred,” and divide the rest between his daughters. Mrs. Johnson testified that before her father’s death there had been negotiations between him and her husband relative to purchase of the place by the latter for $3,000, of which she told Bennett in their discussion of the matter and, accepting Bennett’s version of his understanding with her father to the effect that it was a trust deed the oral conditions for which would be carried out, she spoke of the possibility of their borrowing the money and buying the 40 acres, saying if they did so the business would be done through Mr. Stacey, cashier of the Akron bank in Akron, whom she requested Bennett to see.

Stacey testified that he first learned of Newton’s death from Mrs. Johnson who called to see about borrowing money to buy the place from Bennett to whom her father had deeded it under an oral trust, as above related, proposing to mortgage it and another property for the money, and said Bennett intended to call upon him in reference to the sale; that Bennett did call in a few days and in their discussion stated the “other valuable consideration” referred to in the deed, as to which there was no writing, was the care of Newton during his life and burial at his death, admitting, however, that he was to give Alfred $200; that Stacey discussed the matter of the deed with him; pointed out the inaccuracy in description, told him that under the condition of the title the bank could not accept a mortgage on the property and in the interest of all concerned advised some equitable settlement of the matter, to which Bennett at that time seemed agreeable and after some further discussion he consented that in consideration of $200 for his services and expenses he would quitclaim to the heirs, or estate, and took with him a quitclaim deed which Stacey prepared at his suggestion to be executed by himself and wife, agreeing to then mail it to either Stacey or -the probate court. Bennett admitted the interview as outlined and that he then said Newton requested $200 be given his grandson, but explained it was after the deed had been executed, denied that he ever stated or admitted any trust relations, or that there was any consideration for the deed beyond Newton’s care and burial, or that he ever agreed to sign the quitclaim deed Stacey drew up for $200, saying of it: “I took it away, but not with any intention of signing.” Some days later Stacey received a short letter signed by Bennett’s attorney, as follows:

“May 15th, 1915.
“Mr. C. W. Stacey,
“Akron, Michigan.
“Dear Sir: Mr. George Bennett was in to see me today and requested me to say that he would not give a deed for the consideration you promised him.
“Yours truly,
U 99
y

It is undisputed that the .description in the deed was erroneous, covering but 20 acres of the 40 which Newton owned. It was taken from, a copy of a lease given to a tenant the preceding August, over which he had some trouble because of the misdescription. He had shown this lease to Stacey late in the fall of 1914 and consulted him about it, expressing himself as greatly incensed at the blunder made by the party who drew the lease for him. That he should himself so soon thereafter furnish this same faulty lease to the conveyancer in Lapeer from which to describe this property, which was all he owned, is, at least, evidence of extreme forgetfulness.

Plaintiff’s present claim to equitable relief in correction of the faulty description in this conveyance is that his alleged oral agreement for care and burial has been performed, and that no other consideration entered into the transaction.

Defendants’ claim, both in defense and for affirmative relief by way of cross-bill, is mental incompetency, undue influence, inadequacy of consideration and, at best, that deceased was led to suppose the parol understanding between the parties was enforcible, which as shown by plaintiff’s own statements was on his part a trusteeship to sell the property and disburse the proceeds, after fairly compensating himself for deceased’s care and burial, amongst deceased’s daughters and grandson as directed and understood.

This record by almost undisputed testimony furnishes abundant proof to sustain the equitable features of defendants’ contentions. The only fairly debatable issue of fact is deceased’s mental incompetency, and we find no occasion to disturb the conclusion reached by the trial court on that issue. Under the undisputed facts shown and evident short expectancy of life of the grantor when the deed was made, the claimed consideration, left in parol, was so grossly inadequate as in itself to be evidential of overreaching and undue influence. The following conclusions of the trial court are well sustained by this record:

“The claimed agreement for support, etc., rested in parol, the very brief expectancy of life of grantor, his extrejne age, his _ enfeebled and weak-minded condition, and the claim made that he sought to convey all the property he possessed to a stranger in blood to the exclusion of his family, with whom his relations were pleasant, leads to the conclusion that such conveyance was obtained by the exercise of undue and improper influence at a time when the grantor was so physically and mentally weakened as to be unable to withstand suggestion, properly safeguard his rights, or realize the legal consequences of his act.”

In this case it is undisputed that when he executed this deed deceased was in the last stages of lingering tuberculosis, distressed with a serious and annoying cough, old, weak and feeble, stricken with an incurable disease, and of short life expectancy. But a few days before his death he deeded his entire property to a stranger in blood at whose house he was a guest, for an evidently inadequate consideration, the conditions of which rested in parol. Such facts in themselves tend strongly to prove undue influence. The fact that the deed was not attacked until after the grantor’s death is of little significance where he survived so short a time. The case of Davis v. Calvert, 18 Ky. L. Rep. 975, is quite similar to this in the particular that following the grantor’s death, which occurred within four months after executing a deed given in consideration of support, his grantee brought an action to correct a misdescription in the instrument making the grantor’s heirs defendants, who in response asked affirmative relief and the deed was held invalid on similar grounds to those urged in the instant case.

Without extending this opinion to comment further upon the testimony, we conclude that this record fully supports the conclusions of the learned circuit judge that this deed was not only inequitable because for a grossly inadequate consideration, but that its execution was the result of undue influence at a time when deceased was so physically and mentally weakened by disease as to incapacitate him. for intelligent and independent action in protection of his rights in such a transaction.

In March, 1917, plaintiff mortgaged the property in question for $600, much of which he expended in redeeming the premises from foreclosure sale under the past due mortgage which deceased had given, and payment of interest, back taxes, etc. The decree of the trial court holding the deed in question void takes cognizance of this and protects him from loss in that particular. It also protects his claim for support, medical services and burial of deceased by referring the matter to the probate court, making the same as it may be there determined a lien in his favor upon said, premises.

The decree is affirmed, with costs to defendants.

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

The late Justice Ostrander took no part in this decision.