text:
    GRAND UNION TEA CO. v. LEWITSKY.
    1. Injunction — Bill—Sufficiency—Violation of Contract-Adequate Remedy at Law.
    A bill to restrain the violation of a contract of employment which alleges that defendant is making use of the information gained through his employment with complainant to win away to a competitor complainant’s customers, and that he is doing so by making fraudulent misrepresentations of fact, states a case as to which the remedy at law is inadequate.
    2. Statutes — Construction—Amendatory Statutes — Limitation to Scope of Act Amended.
    Act No. 329, Pub. Acts 1905, invalidating contracts in restraint of trade, is an independent act with a title of its own, and is not limited in its operation by its section 7 to such contracts as are within the purview of Act No. 255, Pub. Acts 1899, for the prevention of trusts, monopolies, and combinations, though said section 7 declares Act No. 329 to be supplementary to, declaratory of, and in addition to, said Act No. 255.
    3. Constitutional Law — 14th Amendment — Right to Contract —Restraint of Trade.
    Act No. 329, Pub. Acts 1905, invalidating agreements not to engage in a particular employment, except when ancillary to a sale of a business, does not conflict with the 14th Amendment of the Federal Constitution, by prohibiting the making of reasonable contracts for the protection of one’s business.

      4. Contracts — Employment — Restraint of Trade — Enforceability.
    A contract of employment by which the employé agrees not to engage in business in the employer’s line for one year after leaving the employment is invalid as contrary to the express terms of Act No. 329, Pub. Acts 1905.
    Appeal from Wayne; Mandell, J.
    Submitted April 16,1908.
    (Docket No. 79.)
    Decided June 27, 1908.
    Bill by the Grand Union Tea Company against Ignaoy Lewitsky to restrain the violation of a contract of employment. From an order sustaining a demurrer to the bill, complainant appeals.
    Affirmed.

      W. W. Wicker (John C. Donnelly, of counsel), for complainant.

      Frank C. Golden and Choate & Webster, for defendant.
   Blair, J.

On the 11th day of February, 1907, the parties to this suit entered into the following agreement in writing:

“Whereas, second party is desirous of securing employment with first party in the business of soliciting orders for and delivering teas, coffees, spices, baking powder, light groceries, etc., and such other goods as are now or may be hereafter handled by first party at its store at No. 140 Michigan avenue, Detroit, Mich., the territory to be solicited and operated by second party to be in the city of Detroit, Mich., and such other place or places as may be mutually agreed upon.
“Therefore it is agreed that first party shall pay second party a commission of 20 per cent, upon all goods delivered by him as, for and in lieu of salary; that second party will devote his entire time and attention to said business and, to the best of his ability, work for the benefit of first party.
“ Said second party agrees that he will not leave the employ of first party without giving first party two weeks’ notice in writing of his intention so to leave, and further agrees in consideration of the employment and payment of commission herein provided that, should he leave the employ of first party, he will not engage in the business of soliciting orders for or delivering any teas, coffees, spices, baking powder, light groceries, etc., in said city of Detroit, Mich., or such other places as he may operate in under this agreement for a period of one year from and after the date of his so leaving said employment.
“Said second party further agrees that should he at any time leave the employ of first party or be discharged from such employ, he will, upon such leaving or discharge, turn over and deliver to said first party, at its store in Detroit, Mich., all goods, wares and merchandise and property of every name, kind and description in his possession pertaining to said business.”

Defendant having left complainant’s service and entered the employ of a rival company, complainant filed its bill , of complaint, containing, among other allegations, the following:

“Third. Your orator further represents that its business is, to a large extent, conducted and carried on through its agents and representatives canvassing from house to house, in the city of Detroit, soliciting orders for such teas, coffees, spices, baking powder, light groceries, etc., and thereafter such agent delivering the goods to the respective customers so ordering; that there are a large number of your orator’s customers in said city of Detroit, who are called upon by said agents periodically, to secure their orders and deliver the goods so ordered, and that each of said agents has a particular route or territory which he canvasses, and the trade of which he handles for your orator; that in the conduct of said business, each of said agents has a route which requires said agent to call upon the customers upon said route on particular days of each week, and that it requires one week for each of said agents to cover said route; that the names and addresses of the customers, together with the day of the week they should be called upon, are kept upon cards, each card containing the information for one customer, and upon which is placed the kind and quantity of goods ordered by each customer respectively; that in the establishment of such routes, your orator expended large sums of money in securing customers, and in securing the necessary information placed upon such cards, and that such information is for the purpose of retaining the trade and good will of its customers, and that the same is a trade secret necessary to enable it to carry on its business, and that the cards, together with the information thereon, for each of said routes, is of great value, to wit: of the value of $500 and upwards.
“ Fourth. Your orator further shows that the defendant herein, Ignaoy Lewitsky, entered the employ of your orator on or about the 11th day of February, 1907, under and pursuant to the terms of a written agreement, a copy of which is hereto attached, marked Exhibit A, reference to which is hereby prayed for greater certainty, and the same made a part hereof; that said defendant continued in the employ of your .orator, soliciting orders upon a route or territory, and delivering the goods so ordered, in said city of Detroit, and continued so to do until the 1st day of October, 1907, at which time he voluntarily left the employ of your orator, and has not since been in its employ; that the business of said route aggregated approximately $85 per week; that at the time of the making of said contract, said defendant, Ignaoy Lewitsky, was, as your orator is informed and believes, and upon such information and belief charges the fact to be, unfamiliar with, and ignorant of such business, and that your orator from the said 11th day of February, 1907, until the 16th day of March, 1907, paid said Lewitsky a salary, in lieu of the commission provided for in said contract, and in addition thereto, your orator caused other of its agents, to whom your orator paid salaries, to canvass upon said prospective route, and secure customers and orders, and the expense thereof was paid by your orator; that your orator, in building up said route, and securing customers thereon, expended a large sum of money, to wit: The sum of $225 and upwards, and that all the information acquired by such other employés of your orator, were placed upon said cards of said route, and were turned over to said Lewitsky for his use as your orator’s agent, in conducting the business on said route.
“jFifth. Your orator further shows that there are in said city of Detroit, other business houses, handling and selling the same character of goods and merchandise as are handled and sold by your orator, and who conduct their business in the same general manner as is conducted by your orator, by the canvassing and soliciting of orders from house to house.
“Sixth. Your orator further shows that on the 1st day of October, 1907, said defendant then being in the employ of your orator as aforesaid, left its employ, and thereafter and on the 4th day of November, A. D. 1907, in violation of the terms of his said agreement, Exhibit A, hereto attached, entered the employ of the Great Atlantic & Pacific Tea Company, a company engaged in the selling of the same character of goods and merchandise as are sold by your orator, and which .conducts its business in the same general manner as your orator, as aforesaid, and on said 4th day of November, 1907, in violation of the terms of his said agreement, commenced canvassing and soliciting orders for teas, coffees, spices, baking powder, light groceries, etc., for said Great Atlantic & Pacific Tea Company, and since said 4th day of November has been, and now is, engaged in so canvassing and soliciting orders for such goods, wares and merchandise, and delivering the same to the customers, and endeavoring to induce the customers of your orator to discontinue buying goods from it, misrepresenting the facts in the matter, and stating, among other things, to such customers that the agent of your orator, who has since said defendant left your orator’s employ canvassed and solicited orders upon the route and in the territory and from the customers theretofore called upon by said defendant, would not call upon them any more, but that he, said defendant, would call upon them and take their orders and deliver them goods, and has so represented to a large number of the customers of your orator in said city of Detroit; that said defendant, by reason of his employment as such salesman and canvasser, was by your orator entrusted with, and has become possessed of the facts shown by said cards, and the information relative to the names and addresses and wants of the customers upon said route, and the day that each of said customers should be called .upon, and that said defendant has learned or copied the lists of said customers on said route and the other data and information connected with said trade, and is now in possession of such information and is using the same to the prejudice of your orator’s rights and in the interest of said competitor of your orator.
Seventh. Your orator further avers that by reason of the action of said defendant, and that if he be permitted to continue in such canvassing and soliciting of orders upon said route, or in the city of Detroit, and from said customers of your orator in the interest of said competitor, or any competitor of your orator, a great and irreparable injury will be done to your orator, and that it will be damaged to the extent of five hundred ($500) dollars and upwards in the loss of profits and business to which it is lawfully entitled, and that said defendant is now seeking to divert and take away from your orator to the competitor aforesaid of your orator.
"Eighth. Your orator further shows that it is informed and believes, and upon such information and belief charges the fact to be, that said defendant intends to divulge the trade secrets aforesaid of your orator and the names and addresses of its customers on said route, together with the other knowledge and information acquired by him while in the employ of your orator as aforesaid.
“Ninth. Your orator further avers that said defendant is financially irresponsible and unable to answer in damages, and that your orator is without remedy in a court of law and is without remedy except in a court of equity:
‘ ‘ Wherefore your orator prays: * * *
“ 6. That said defendant, Ignaoy Lewitsky, may, by the order of this court, be restrained from canvassing or soliciting orders for or delivering teas, coffees, spices, baking powder, light groceries, etc., in said city of Detroit, Wayne county, Michigan, and from soliciting orders or ' delivering goods to any of the customers of your orator in said city of Detroit, and that he be also restrained from in any manner revealing, showing or communicating the names or addresses of said customers of your orator upon said route, or any of them, or of any of its route or routes, to aby person, firm, copartnership or corporation, or from divulging or communicating to any person or persons his knowledge of the dates upon which each of said customers should be called upon.”

To this bill of complaint defendant demurred, for the following reasons:

1. Because complainant has a full, complete and adequate remedy at law.
“ 2. Because the contract between complainant and defendant attached to the amended bill of complaint is against public policy, void and illegal.
“8. Because the contract which is the basis of the suit is void, illegal and against public policy.
“4. Because the injunction asked for would be illegal and void.
“5. Because there are not sufficient allegations in the bill outside of the contract that have no reference to the contract to entitle complainant to an injunction.
“6. Because, in the absence of a written contract, complainant is not entitled to an injunction against defendant.
“7. Because the only contract between complainant and defendant is void. It is just the same as though there was’ no contract between complainant and defendant, and in the absence of a written contract complainant cannot restrain defendant from soliciting old customers.”

The demurrer was sustained by the court and a decree entered dismissing the bill of complaint. From such decree, complainant appeals to this court.

The questions presented by the briefs for our determination are:

(1) Has complainant an adequate remedy at law ?

(2) Does the contract fall within the provisions of Act No. 329 of the Public Acts of 1905, entitled:

“ An act relative to agreements, contracts and combinations in. restraint of trade or commerce.”

(3) Is said act constitutional ?

Counsel for defendant, in support of their demurrer as to this point, argue that as the contract in question is not a contract of sale, nor incidental or ancillary to nor in support of a contract of sale, but a mere contract of employment, requiring no special training, knowledge, skill or experience for its performance, the case is ruled by Osius v. Hinchman, 150 Mich. 603. A reading of the case cited in comparison with the bill of complaint in this case is sufficient to show the essential dissimilarity of the two cases. The bill of complaint in the present case noi only alleges that the defendant is making use of the information gained through his employment to win away to a competitor complainant’s customers, but is doing so by making fraudulent misrepresentations of fact. Under such a showing it cannot be said that the complainant has an adequate remedy at law. Davies v. Racer, 72 Hun (N. Y.), 43.

Section 1 of Act No. 329 of the Public Acts of 1905 provides that:

‘ ‘ All agreements and contracts by which any person, copartnership or corporation promises or agrees not to engage in any avocation, employment, pursuit, trade, profession or business, whether reasonable or unreasonable, partial or general, limited or unlimited, are hereby declared to be against public policy and illegal and void. ”

It is clear that the contract in question comes within the letter of the section and is governed by its terms, unless the provisions of section 7 limit the operation of the act to such contracts as are within the purview of Act No. 255 of the Public Acts of 1899 (aimed at the prevention of trusts, monopolies and combinations), as claimed by complainant. We do not think the act of 1905 is to be so construed. Section 7 reads as follows:

“ This act is declared to be supplementary to, and declaratory óf, and in addition to, Act No. 255 of the Public Acts of 1899, page 409.”

The act is not a merely amendatory act limited to the object embraced within the title of the original act, but is an independent act with a title of its own. Whatever effect the act of 1905 may have upon the construction of the act of 1899, we would not be warranted in wresting the language of section 1 from its obvious meaning to make it conform to the title of the act of 1899, provided its provisions are reasonably within its own title, as we think they are.

Complainant’s counsel contend that the statute violates the 14th Amendment to the Constitution of the United States, “in that it attempts to prohibit making of reasonable contracts” for the protection of one’s business.

Section 1 of the act must be read in connection with section 6, which provides:

“This act shall not apply to any contract mentioned in this act nor in restraint of trade, where the only object of the restraint imposed by the contract is to protect the vendee or transferee of a trade, pursuit, avocation, profession or business, or the good will thereof, sold and transferred for a valuable consideration in good faith and without any intent to create, build up, establish or maintain a monopoly.”

Construed together, the two sections provide, in substance, that all agreements not to engage in any avocation, employment, pursuit, trade, profession, or business, except where the only object of the restraint is to protect the vendee or transferee of a trade, pursuit, avocation, profession or business or the good will thereof sold and transferred for a valuable consideration in good faith, shall be void as against public policy.

It will be observed that this statute exempts from its condemnation contracts incident or ancillary to the sale of a business, trade, or profession, which have frequently been sustained by this court. Similar statutes exist in other States, which appear to have been treated as valid exercises of legislative power by their courts. See Prescott v. Bidwell, 18 S. Dak. 64; Merchants’ Ad.-Sign Co. v. Sterling, 124 Cal. 429 (46 L. R. A. 142); Hulen v. Earel, 13 Okla. 246; Dodge Stationery Co. v. Dodge, 145 Cal. 380.

The usual ground upon which contracts in restraint of trade are held to be invalid is that they are contrary to public policy.

“ Public policy in the administration of the law by the court is essentially different from what may be public policy in the view of the legislature. With the legislature it may be, and often is, nothing more than expediency. The public policy which dictates the enactment of a law is determined by the wisdom of the legislature.” Enders v. Enders, 164 Pa. 266 (27 L. R. A. 56).

Originally, at the common law all contracts in restraint of trade were held to be invalid as against public policy. But considerations of public policy vary with the times and the progress of civilization, and contracts in restraint of trade have been very much limited by decisions of the courts and by statutes, and—

“A doctrine has been introduced in some of the later cases, both English and American, which may be called the doctrine of the reasonableness of the restraint.” 9 Cyc. p. 529.

The history of the doctrine indicates that it has been, from the beginning, a proper subject for legislative consideration, and only in case of a clear violation of constitutional rights ought the courts to interfere with legislative discretion.

Limited as the statute is, we do not think it can be held to invade any constitutional right of the complainant under the 14th Amendment of the Federal Constitution. The contract must, therefore, be held to be invalid, and the decree is affirmed, with costs to defendant.

Grant, C. J., and Montgomery, Carpenter, and MoAlvay, JJ., concurred.


source: Caselaw Access Project

author: Moore, J.

license: Public Domain

text:
    LONIER v. ANN ARBOR SAVINGS BANK.

    Trial — Motion for Directed Verdict — Question of Fact — Submission to Jury.
    Where the testimony of the principal witness, on direct examination, supported plaintiffs’ theory that defendant bank discounted á note belonging to plaintiffs on an unauthorized indorsement of plaintiffs’ agent,, who absconded, and on cross-examination gave inconsistent testimony tending to support defendant’s theory that it loaned money to witness, who paid it to the agent, there was a question for the jury as to which portion of the witness’ testimony they would believe, which should have been submitted to them, notwithstanding a motion by both parties for a directed verdict.

      Error to Washtenaw; Kinne, J.
    Submitted May 4, 1908.
    (Docket No. 88.)
    Decided June 27, 1908.
    Trover by Louis Lonier and William J. Hoffer, co-partners as Lonier & Hoffer, against the Ann Arbor Savings Bank. There was judgment for defendant on a .verdict directed by the court, and plaintiffs bring error.
    Reversed.

      A. F. & F. M. Freeman, for appellants.

      B. M. Thompson and Arthur Brown, for appellee.

       Rehearing denied September 10, 1908.

   Moore, J.

This suit was commenced by declaration containing a special count for moneys had and received and a count in trover for conversion of a note. The defendant pleaded the general issue. At the close of the testimony, the attorneys of each of the parties contended the judge should direct a verdict one way or the other. The trial judge directed a verdict in favor of defendant, and plaintiffs appeal, and assign error upon the direction of a verdict for defendant and the refusal of the court to direct a verdict for plaintiffs.

Plaintiffs are millers at Manchester, and defendant is a banking corporation at Ann Arbor. Mr. Heusel is a baker at Ann Arbor and was a customer of plaintiffs, who had in their employ as a traveling salesman one Donaldson, whose duty was to sell their goods. He was authorized by plaintiffs to settle accounts and receipt therefor. It is claimed by plaintiffs he had no authority to indorse, * negotiate, or discount commercial paper given on settlement of an account with a customer of plaintiffs, but was directed to send such commercial paper home to plaintiffs, and, when cash was paid to him in settlement of an account, he was instructed to go to a bank, buy a draft, and mail the same to plaintiffs. It is claimed by plaintiffs that on April 4, 1906, Mr. Heusel was indebted to them in the sum of $367.29 for flour, and that on that date he settled this account, through Donaldson, by giving his note, payable to the order of Lonier & Hoffer, for the above amount, and Donaldson receipted the bill by marking it “ Paid,” and took the note and discounted it and embezzled the funds. On the part of defendant, it is claimed that, instead of discounting the note for Mr. Donaldson, they loaned the money to Mr. Heusel, and that, if Mr. Donaldson did anything wrong in indorsing the note, it is a matter between the plaintiffs and Mr. Heusel. The testimony of the plaintiffs was to the effect that, while Mr. Donaldson was authorized to make collections and to receipt therefor, he was not authorized to indorse and discount notes given him in settlement of accounts.

Mr. Heusel was a witness. The material parts of his testimony are as follows:

I knew one Donaldson, who was a traveling salesman or drummer for plaintiffs. About April 4, 1906, I was owing Lonier & Hoffer for some flour they had shipped from Manchester to me. I was owing them $367.29. I paid that account by giving my note. * * * I signed the note and delivered it to Mr. Donaldson, and when I delivered the note to him he receipted my bill. He marked my bill ‘ Paid,’ and I considered that had closed the account. At the time that I delivered the note to Donaldson, he receipted the bill of Lonier & Hoffer, that this note was given for, and he took this note and went away. The note was made out at the Ann Arbor Savings Bank. I was down with him at that time.’ I never saw the note again, until I paid it. * * * You [Mr. Freeman] had been to see me, and had a talk with me about Donaldson, but I don’t remember whether or not you told me not to pay that note to anybody except Lonier & Hoffer. * * * You told me that Donaldson had absconded. I heard that before you told me. When I paid the note, it was down at the bank, as much as I know. I cannot remember the date that I paid it. I cannot state whether or not Mr. Hoffer was over to see me about the time that I paid the note. I had been buying goods from Lonier & Hoffer for a number of years. Mr. Donaldson sold me the goods.”

Cross-examination:

“Q. Had you ever paid this man before?
“A. I did. * * *
“Q. How many times ?
“A. That I don’t know. I simply bought flour whenever I needed it, and paid for it whenever I had the money. I had been doing that for a number of years, five or six years at least. While I was with my brother we bought flour from this same man and paid him right along.
“Q. Did you ever pay anybody else for flour received from this agent up to that time ?
“A. Since I have been alone I always settled with Donaldson, when he was here; but, when I was with my brother, he always attended to that. Since I have been alone, I have always attended to it.
“ Q. Did you ever settle any accounts with the plaintiffs or either of them during the time Donaldson worked for them ?
“A. I always settled with Donaldson.
“Q. How did you settle with him ? Give him money ?
“A. I gave him a note once or twice, and the last time I gave him checks.
“Q. And he took them to the bank and got the money, did he ?
“A. That is the time, I those two last notes.
Q. Can you remember the execution of a note of January 4, 1906, to Lonier & Hoffer for $590 ?
“A. I think so. I think it was due in four months. I was down to the bank with him. I think Mr. Fritz made out the note, and I signed the note, and he signed the note and got the money.
“Q. Then a few months after that, on April 4, 1906, or three months, April 4th, Mr. Donaldson came again, didn’t he, and at that time you went to the bank, and you gave a small note to take up a portion of the $590 note, and a new note for $367.29 ?
“A. Yes.
Q. You signed the notes ?
“A. Yes.
“Q. And Mr. Donaldson signed the notes?
"A. Yes.
“Q. And the money was laid over there on the table or desk right where Mr. Fritz sits, and he took the money and went away, did he not? That $367.29 ?
“■A. Of course, I have not seen that he took the money. At least I cannot remember it. I did not get it.
“Q. So that if Mr. Fritz paid any money there, or anybody got any money, Donaldson got it ?
“A. Donaldson got it; yes, sir.
“Q. On that date you gave two notes, you paid $400 in cash on the $590 note that reduced it to $190 ?
“A. Yes, and I gave a new note for that.
“Q. And you also borrowed enough money from Mr. Fritz to pay up this $367.29?
“A. Yes, sir. * * *
“Q. I show you paper marked ‘Exhibit D 1,’ and ask you whether that is the discount slip that Mr. Fritz made out at the time you obtained that loan ?
“A. Yes. (Exhibit D 1 is as follows: ‘Discount by Ann Arbor Savings Bank 4 — 4—1906. For Sam Heusel, 6 per cent., $367.29, 6 percent., $190.’)
“Q. When this note for $367.29 came due, you paid it, did you, or about that time ?
“A. Yes, in the course of business I paid it to the Ann Arbor Savings Bank.”

Redirect examination:.

Q. In answer to Mr. Brown, you said that upon April 4th you borrowed some money of the Ann Arbor Savings Bank. You did not give any note that day running to the bank, did you ?
“A. That I cannot remember.
“ Q. You gave a note, just as you testified a little while ago, that was payable to the order of Lonier & Hoffer ?
“A. Yes, sir.
Q. And Donaldson wrote on the back of that note Lonier & Hoffer’s name, didn’t he ?
“A. Yes.
“Q. And he took the note and gave it to the cashier of the bank, didn’t he ?
“A. I don’t know whether he did or not.
“Q. You did not see him do that?
“A. I wasn’t down there at that time.
“Q. The last you saw of the note was when you gave it to Mr. Donaldson ?
“A. Yes, sir.
“Q. There is something about a $190 note that was given. Had you given a note to Mr. Donaldson before April' 4th in settlement of accounts ?
“A. I guess I did, if I can remember. I don’t think I ever told you about that before. It was for $590. That note was paid.' When it became due it was returned to me. It was not returned to me before I paid it. When I paid it, it was done at the bank. I went to the bank and paid $400 in cash and gave a new note to the bank for $190.
“Q. And you also upon that same date gave a note for $367.29, to Lonier & Hoffer, payable to Lonier & Hoffer, didn’t you ?
“A. Yes.
“ Q. And the last you saw of that note, which I show you, was when you handed it to Mr. Donaldson ?
“A. Yes.”

Recross examination:

“ I went with Mr. Donaldson to the bank on April 4th, and when I went there I had a note there of $590 and wanted to make arrangements to take care of that $590 note, and also pay Mr. Donaldson for a bill that was then coming due.
“Q. For $367.29, so you paid Mr. Fritz $400 upon the $590 note and gave him back another note for $190 ?
“A. Yes.
“Q. And Mr. Donaldson indorsed that, did he not?
“A. Yes.
“Q. Signed Lonier & Hoffer’s name on the back of it ?
“A. Yes,'sir.
“Q. Then you also gave Mr. Donaldson another note for $367.29, payable to the order of Lonier & Hoffer ?
“A. Yes.
“Q. And Mr. Donaldson signed that ?
“A. Yes.
“Q. And Mr. Fritz laid the money out there on the desk, and either you or Donaldson took the money ?
“A. He must have taken it. I didn’t get it.
“Q. So you paid the $590 note with $400 in cash and a new note, and also paid this bill by getting another loan from the bank for $367.29 ?
“A. Yes, sir.
“Q. And Mr. Donaldson went away with the money, didn’t he ?
“A. He must.
“Mr. Freeman: We move to strike out the testimony of any other note as incompetent and immaterial. (Objection overruled. Exception for plaintiffs.) ”

Redirect examination:

“Yes, back in January I gave a note to Mr. Donaldson for $590. That note ran to Lonier & Hoffer. The next I knew of it, it was over at the Ann Arbor Savings Bank. Upon April 4th, I went to the Ann Arbor Savings Bank with $400 in cash. The bank was claiming to own that note at that time, and I went to the bank with $400 in cash and paid that note to the bank with the $400 in cash and another note. It seems to me that the note must have been given to Lonier & Hoffer. Yes, the bank claimed to own that $590 note. They had it. I was paying a note the bank had against me. I paid that. I owed Lonier & Hoffer only $367.29.
“Q. You paid that by giving this note of $367.29 to Lonier & Hoffer ? Is that right ?
“A. I think so.
“Q. Now, the bank had a note against you for $590 that you had given to Lonier & Hoffer, but the bank was then claiming to own it, is that true ?
“A. I don’t see. Of course, I understand what you mean, I can’t recollect; but it seems to me that $190 note was made out to Lonier & Hoffer. Of course, I don’t know.
“Q. You paid $400 on the note ?
“A. I understand.
“Q. You paid $400 in cash that you had to the bank?
“A. Yes.
“Q. That left you owing $190 to the bank upon that note?
“A. Yes.
“Q. What reason would there be for giving a note to Lonier & Hoffer ?
“A. I couldn’t tell you. It has been so long ago.
“Q. Then you are not able to say whether the $190 note ran to Lonier & Hoffer or to the bank ?
“A. I don’t believe I can.”

Recross examination:

“ On January 4th when I gave this $590 note I was indebted to Lonier & Hoffer for $590 worth of flour, and went to the bank with Mr.'Donaldson.
“Q. You went with Mr. Donaldson, the agent of Lonier & Hoffer, who pretended to be their agent, at least, down to the bank, and asked Mr. Fritz for a loan of $590, didn’t you, to pay that, and you got it on your note there that day?
“A. Yes.
“Q. And Mr. Donaldson took that $590 and put some more money with it and bought a draft and sent it to Lonier & Hoffer ?
“A. I think so. When that $590 came due I owed it at the bank and had $400 in my bank that I could spare. I paid $400 on that note and gave a $190 note for the balance.
“Q. And gave a new note for $367.29, and turned it over to the other fellow; is that true ?
“A. Yes.”

Redirect examination:

“This note of $367.29 was given for flour; it was not a renewal of any old note or anything of that kind; that was for a bill of flour, and when I gave the note Donaldson marked bills ‘paid.’”

It will be observed that the testimony of this witness drawn out upon the cross-examination is inconsistent with that given on his direct examination. His testimony on the direct examination tends to support the theory of plaintiffs. His testimony on the cross-examination as well as the discount slip tends to support the theory of defendants. The cashier of the bank was not a witness.

Under these circumstances, notwithstanding the request of counsel that the judge should direct a verdict one way or the other, we think he ought not to have done so, but should have permitted the jury to say which portion of Mr. Heusel’s testimony they believed.

Judgment is reversed, and new trial ordered.

Ostrander, Hooker. Carpenter, and McAlvay, JJ., concurred.


author: Ostrander, J.

text:
    MOORE v. BULGREEN.
    1. Easements — Right of Way — Establishment—Prescription.
    Defendant does not show a prescriptive right to cross complainant’s land to reach his own, by showing that from 1888 to 1906 he has, at intervals, crossed one or other or both of complainant’s parcels, and that as late as 1892 he sought, without success, to bargain for a way, and that such use as he made of the land in crossing it was at that time permissive; that since that time the way has been repeatedly obstructed, which obstructions he has removed.
    2. Adverse Possession — Trespass—Acquisition of Right.
    Whether repeated trespasses accompanied by violence and by destruction of property will ever grow' into a right as by adverse possession, they cannot do so in less time than is required to gain a right by open, notorious, hostile, and peaceable possession, or use.
    3. Easements — Right of Way — Prescription—Tacking Uses.
    Assuming that a way originally by permission may in some cases become one of right by hostile use, the period when it was used by permission cannot be tacked on to the period of hostility for the purpose of making the statute period.
    4. Same — Bill to Restrain Trespass — Effect of Allegations.
    An allegation in a bill to restrain the use of a claimed right of way that defendant “ has not now, and never had any right of way, * * * either by prescription, license, or easement,” does not require the court to assume that from the beginning defendant’s use of the land was adverse.
    Appeal from Sanilac; Beacü, J.
    Submitted May 4, 1908.
    (Docket No. 48.)
    Decided June 27, 1908.
    Bill by Elizabeth Moore against Albert Bulgreen to restrain a trespass upon lands. Defendant filed an answer in the nature of a cross-bill to quiet title. From a decree for complainant, defendant appeals.
    Affirmed.

      Babcock Brothers, for complainant.

      William, H. Aitkin (Charles F. Gates, of counsel), for defendant.
   Ostrander, J.

Complainant owns the southwest quarter of southeast quarter of section 29, and the northwest quarter of northeast quarter of section 32, in town 12 north, of range 13 east. She filed her bill in May, 1906, asking for a decree restraining defendant from going upon and crossing over said lands, from tearing down and removing her fences and gates. In his answer defendant claims to own a strip from the southeast quarter of the southeast quarter of section 29 to the east 25 acres of the south half of southwest quarter of the same section, which he also owns, and he describes the strip as—

“ Land two rods in width and the center line thereof commences about one rod north of the southeast corner of the southwest quarter of the southeast quarter of section 29, and goes in a southwestern direction until it gets one rod south of the section line between sections 29 and 32 in said township, then along the north side of said section 32 and within one rod of such section line until it reaches within one rod of the quarter line running north and south across said section 32, when it goes north for about seven rods to a gate maintained by this defendant for more than fifteen years.”

He avers that he—

“Claims such rights by adverse possession for more than fifteen years, and that such way is clearly defined and has been in such use for more than fifteen years and no proceedings were instituted by said complainant or her grantors in law or equity within said fifteen years to deprive this defendant of said way and during all of which time the said defendant admits that he has used the same to drive his teams, vehicles, farm machinery and stock across said lands at his will and pleasure which was well known by said complainant and her grantors during said fifteen years and upwards,” and also that it is a way of necessity without which “he cannot reach said twenty-five acres, which he is using under an order of the court in a suit now pending and which cannot be reached any other way, or to go from said twenty-five acres to either the southeast quarter of the southeast quarter of section 29 or the northwest quarter of the northwest quarter of section 33 in said township.”

Defendant also owns the north half of the southeast quarter of section 29, so that his land bounds complainant’s north 40 acres on the east, north, and west sides. He asks for affirmative relief and for a decree declaring him to be owner of the strip of land in fee simple. In the court below it was found that defendant had no right, title, or interest in or to the land for a right of way or otherwise, and no right to cross or recross any part thereof. It is not now claimed that there is a way of necessity. If the claim should be made it could not be supported. We do not understand the theory according to which defendant can claim to own any part of the land in fee. The title deeds show that complainant owns the fee, and the testimony offered by defendant tends at most to establish an eásement. It appears that defendant acquired the 25 acres of land at the western terminus of his claimed right of way in 1888, that he cleared it and later raised crops upon it, and that he has at intervals from that time to 1906 reached the land by crossing one or other or both of the complainant’s parcels hereinbefore described. There is a swamp or beaver dam meadow in the southwest and west portion of the southwest quarter of the southeast quarter of section 29, extending onto adjoining property, through which a drain has now been cut. It appears to have been understood that at some time a road would be built on the section line between 29 and 32, and the highway commissioner did lay out a highway along the line. The township board, in March, 1892, reversed the action of the commissioner. Defendant contends that his way has been along a portion of the strip which would have been included in the highway if it had been laid out, and from that strip at each end thereof he has diverged to the north upon complainant’s land to convenient gaps or gates in the east and west line fences. Before the land was all cleared, defendant went over it in various ways at his convenience. At the west he sometimes, as the water permitted, crossed the swamp in one place, sometimes in another, and sometimes passed to the north of it. "We need not set out the testimony at large and we are not required, complainant’s title to the land having been established, to look beyond the testimony produced by defendant, for the purpose of affirming the decree of the court below. The effect of this testimony is that as late as 1892, he sought, without success, to bargain with the owner and occupant for a way across the southwest quarter of the southeast quarter or a portion of it, and that such use as he made of the land in crossing it was at that time permissive. Since that time and before the bill in this cause was filed, the way has been repeatedly obstructed, complainant has sued defendant in justice’s court for trespassing, securing a judgment from which defendant has attempted to appeal to the circuit court. Defendant in his answer asserts that “he has removed all obstructions placed upon said way by complainant or anyone else and still claims the right so to do.” It is true that Tank, from whom permission to cross the land on section 29 was had, did not own the land on section 32. As defendant cannot arrive at that portion of the alleged way from, and cannot leave it by passing to, his own land, it is perhaps not material to discuss or determine whether as to the alleged passageway on section 32 the testimony makes a different case. The way asserted is a single and, by description, a continuous one. Assuming it to be material, it is undisputed that since 1892, when complainant’s remote grantor became owner of both of the 40-acre parcels first herein described, defendant has had neither continuing permission to cross nor peaceable enjoyment of the alleged way or of any way across the land. He has crossed the land many times in opposition to the known wishes and the express commands of the owner and his tenant. He has torn down wire fencing erected by the owner, has rebuilt a gate in the fence, and when the fence was built across the gate he tore that down. To avoid obstructions to his use of the land, he has entered it at various places other than at the gate in the east fence — a gate originally placed there by the owner of the land for his own convenience and first used by defendant by acquiescence of the owner. Whether repeated trespasses accompanied by violence and by destruction of property will ever grow into a right as by adverse possession is a question not involved here. It is clear that it cannot do so in less time than is required to gain a right by open, notorious, hostile, and peaceable possession, or use. And assuming that a way originally by permission may in some cases become one of right by hostile use, the period when it was used by permission cannot be tacked on to the period of hostility for the purpose of making the statute period.

At the hearing, counsel strongly pressed the point that because, in the bill of complaint, it is charged that defendant “has not now, and never had any right of way across said lands of your oratrix, either by prescription, license, or easement, and that he has no right of way across said land, for any of the reasons or excuses given or claimed by him, or for any reason whatever,” the court should assume that from the beginning defendant’s use of the land was adverse. We think the allegation may not be read in a way which will support the argument. What is charged is that defendant has not and never had a right of way.

The decree of the circuit court is affirmed, with costs.

Hooker, Moore, Carpenter, and MoAlvay, JJ., concurred.


author: Carpenter, J.

text:
    FERRY v. AMERICAN SUCTION GAS PRODUCER CO.
    1. Master and Servant — Personal Injuries — Negligence of Master — Failure to Warn.
    Whether a non-delegable duty rested upon the master to provide a method of warning its servants of the approach of an electric crane will not be decided in a case in which it appears that, notwithstanding the absence of formally promulgated rules, the servant in charge of the crane understood that he was to “use all care possible” and to keep watch and call out and warn anyone who might be in the way, and that the accident to plaintiff happened because the operator of the crane was talking with another employe and plaintiff’s location in the path of the crane “slipped his mind.”

    2. Same -Fellow-Servant — Inoompetenoy — Evidence —Sufficiency.
    In an action by a servant for injuries resulting from being run down by an electric traveling crane, in charge of an alleged incompetent servant, evidence examined, and held, insufficient to raise the inference of the operator’s incompetence, especially in view of the fact that the disaster resulted, not from the operator’s unskillfulness, but from a lapse of memory not inconsistent with skill and competency.
    3. Same — Fe llow-Servants — Vice-Principals — Negligence — Delegable Duties — Liability of Master.
    A master is not liable for injuries to a servant resulting from the negligence of his foreman or superintendent in performing a delegable duty.
    Error to Ingham; Wisner, J., presiding.
    Submitted May 5, 1908.
    (Docket No. 71.)
    Decided June 27, 1908.
    Case by Eddie M. Eerry against the American Suction Gas Producer Company for personal injuries. There was judgment for defendant on a verdict directed by the court, and plaintiff brings error.
    Affirmed.

      Black, Beasoner & Hayden, for appellant.

      Clarence D. Clark (Arthur J. Tuttle, of counsel), for appellee.
    Defendant is engaged in the manufacturing business in the city of Lansing. In its shop, which was about 100 feet long and 45 feet wide, was an electric traveling crane used for the purpose of lifting and moving heavy articles from one part of the shop to another. It moved on girders about 12 or 15 feet above the floor. Its mechanism seems to have been comparatively simple. Its movement backward and forward was controlled by a lever which was situated in a cage suspended from one end of the crane. In this same cage were also two other levers and a band brake. One of these levers controlled the movements of a car which constituted part of the crane and moved back and forth across it. The other lever controlled a drum upon a car, which, by means of a chain attached thereto, raised and lowered objects moved by the crane.
    Plaintiff was a mechanic in the employ of defendant. A Mr. Hillprecht was superintendent of defendant’s manufactory in which were employed about 13 men. He directed plaintiff to do some mechanical work in proximity to the track upon which the crane moved. To do this work, plaintiff placed himself, and had to place himself, immediately in the path of the crane. While he was thus at work, one Court Wollpert, another employe of defendant, moved the crane against plaintiff and injured him. This suit was brought to recover damages. It was tried in the circuit court before a jury and a verdict directed in defendant’s favor. Plaintiff asks us to set aside the judgment entered against him. He contends that the evidence warranted the jury finding a verdict in his favor upon two grounds, viz.:
    (1) Negligence in failing to warn plaintiff of the approach of the electric crane.
    (2) That Wollpert was incompetent to operate the crane.

       As to duty to warn or instruct servant, see note to James v. Rapides Lumber Co. (La.), 44 L. R. A. 33.

   Carpenter, J.

(after stating the facts). Duty of warning. It is not contended by plaintiff that the duty resting on defendant of giving warning to plaintiff was a non-delegable duty for the performance of which defendant was responsible. It is contended, however, that a duty rested upon defendant to provide a method of warning, that this duty was a non-delegable duty and that it was not performed in this case. Whether such a duty rested upon defendant or not we do not feel called upon to determine, for we think the evidence proves that if there was such a duty, it was fully performed. It is true that the testimony shows that no rules on this subject were posted or formally promulgated. But it is also true that the testimony proves that it was understood generally, and particularly by Wollpert, the offending employe, that he “was to use all care possible; to keep his eyes peeled for anybody that might be in the way, and if they were in the way to call out and warn them.” It appears, too, that he knew that plaintiff was working in the path of the crane, and that the accident happened, because, as he states: “I was talking with Mr. Avis and it [the plaintiff’s location in the path of the crane] slipped my mind.” No rule that could have been devised by defendant would have been better than the rule which Wollpert understood governed his action, and we, therefore, say that if the defendant was under any obligation to establish rules to warn plaintiff of the movements of the crane, there is no evidence that it failed to perform that duty.

Wollpert’s competency. Was there any evidence from which the jury could have found a verdict for plaintiff upon the ground that Wollpert was incompetent? Wollpert went to work for defendant along the last of February or the first of March. Prior to that time, he had had no experience with an electric traveling crane. Soon after his employment by defendant, he commenced to operate the crane, and from that time until plaintiff’s injury — this occurred May 11th — he operated it many times — he estimates two dozen times. It appears, too, that he was an intelligent man who had worked about machinery for two years before he became defendant’s employé. It does not appear from the testimony that it required a long experience to learn to operate this crane. Indeed, I think it may be said that it is conclusively proved that Wollpert not only understood how to operate it but did operate it skillfully on this occasion. For at the first outcry from plaintiff he did precisely what was required to be done to avoid further injury. And the disaster resulted, not from his unskillfulness, but from a lapse of memory not inconsistent with skill and competency. The ■determining question is whether incompetency should be inferred from Wollpert’s short experience. The record contains considerable opinion testimony bearing upon thi§ question. We refrain from quoting it. But it may fairly be stated that from this testimony it cannot be inferred that a longer experience than Wollpert’s was necessary to enable an intelligent mechanic to safely operate this crane. As bearing upon the requisite experience to insure competency, it is of some significance- that plaintiff himself, who does not seem to have had any prior experience in running electric cranes, after his injury returned to defendant’s employment and took “charge of this electric crane and was in a way able to run it with one hand.” We do not think that this record contains any testimony from which the jury could infer that Wollpert was incompetent.

Another argument advanced by plaintiff compels us to consider the question: Was defendant responsible for the negligence of Hillprecht in performing a delegable duty ? This question is answered in the negative by many decisions of this court. See Guest v. Illuminating Co., 150 Mich. 438; Amoe v. Engineering Works, 151 Mich. 212, and authorities cited in these two opinions.

We conclude that the trial court properly directed a verdict in defendant’s favor.

Judgment is affirmed.

Ostrander, Hooker, Moore, and McAlvay, JJ., concurred.


author: Hooker, J.

text:
    SMAFIELD v. SMITH.
    1. Drains — Enjoining Construction — Remedy.
    Owners of lands not traversed by a proposed drain, and who are therefore not parties to the proceedings, have a remedy in equity by injunction to restrain the construction of the drain where its effect will b§ to cast upon their land waters for which no outlet has been provided.
    2. Same — Flooding Lands — Injunction.
    Owners of lands along a natural watercourse which has been improved at public expense for the purpose of furnishing an outlet for proposed drains, cannot enjoin the construction of such drains where it does not appear that their effect will be to flood complainants’ lands beyond the degree contemplated when the stream was improved, or beyond the extent to which they were previously flooded.
    Appeal from Sanilac; Beach, J.
    Submitted May 4, 1908.
    (Docket No. 49.)
    Decided June 27, 1908.
    Bill by Franklin Smafield and others against John Smith and R. B. Walker, drain commissioners of Sanilac and Lapeer counties, to restrain the construction of a drain. From a decree dismissing the bill, complainants appeal.
    Affirmed.

      Babcock Brothers, for complainants.

      C. F. Gates, for defendants.
   Hooker, J.

Black river runs in a southeasterly direction and empties into the St. Clair river. Elk creek flows northeasterly, emptying into Black river. The complainants own lands in severalty, situate along Elk creek, some miles above its mouth, including some bottom or flat lands along the creek. The testimony indicates that Elk creek is the natural outlet for the water of a large area.

Counsel for the complainants allege that in the year 1899 the drain commissioner of Sanilac county instituted proceedings to clean out, deepen, and widen Elk creek for its entire length, and that this was done, and that so much of the creek as was below a point some miles above complainants’lands was made a “ ten-foot bottom” after which, for a few years, complainants’ lands were not flooded to any extent, but that subsequently other and lateral drains were constructed conducting water to Elk creek, above their premises, when the creek began to overflow its banks, and this tendency has increased from year to year until at the present time great damage is done to their land and crops by freshets.

They claim, further, that the defendants, who are drain commissioners of Sanilac and Lapeer counties, respectively, are now seeking to construct a new drain, to be called the Lapeer and Sanilac drain, the outlet of which is to be in Elk creek above complainants’ lands, and that this drain will take water from some 6,000 acres, and will still further swell Elk creek in times of high water, and increase the damage to the complainants’ lands. Previous to or during 1888 the Elk, Flynn, and Maple Valley drain was constructed. It entered Elk creek below complainants’ premises, some six miles. That drain is yet in existence and use, though it has become somewhat obstructed and has in places been changed in its course by persons through whose lands it passes.

In the main it parallels Elk creek a few miles from it. It is now proposed to intercept this drain by the Lapeer and Sanilac drain and to widen, deepen, clean out, and extend the same, above the point of intersection, which will have the effect of turning some, though not all, of its water into Elk creek above complainants’ premises, the remainder passing down through the old drain.

The complainants have filed the bill in this cause, to restrain the construction of this drain, upon the ground that it will subject their lands to an increased and unnatural flow, to their irreparable injury. The cause was heard at circuit upon its merits, where the bill was dismissed and it is before us upon complainants’ appeal. The defendants contest the complainants’ claim to relief upon two grounds, vizfirst, that complainants have mistaken their remedy; second, that they have failed to make a case entitling them to relief upon the merits.

In substance, the complainants ask a restraining order to prevent defendants from turning upon their land a quantity of water from a proposed drain whose outlet is Elk creek at a point above complainants’ land. The proposed drain not traversing their land, and complainants not being parties to it, the case would seem to be similar to that of Bruggink v. Thomas, 125 Mich. 9, where it was held that the complainant had a remedy by injunction. See, also, Smith v. Township of Eaton, 138 Mich. 514; Township of Merritt v. Harp, 141 Mich. 254. We have no doubt of the jurisdiction of equity in such a case. This leaves the case to be disposed of upon the merits.

The source of Elk creek appears to be on section 11 of Maple Valley township in Sanilac county. The evidence discloses that in 1899, extensive improvements were made in that stream by dredging, so that upon the section upon which it is said to have its origin, a channel 10 feet wide upon the bottom was made. This improvement extended the entire length of the stream which was deepened as well as widened. There is evidence that this improvement was made with a view to its becoming an outlet of water which fell upon the surrounding country which naturally found its way to Elk creek, and that it was contemplated that such water would be discharged through prospective drains. Two or more townships were assessed for benefits, a strip of land 50 or 100 feet wide was condemned or purchased for the purpose, and presumably these complainants were paid for such as was taken from them. Some or all of them took jobs and received their pay for their assistance in making the improvement. They were not assessed for benefits.

While it is true that a drain commissioner must nob turn water upon adjacent lands without providing an adequate outlet, such outlet may be provided in advance and commonly must be. We are not satisfied that the proposed improvement will have the effect of flooding complainants’ lands beyond the degree which was justly contemplated when the Elk creek drain was made, or beyond the extent to which they were previously flooded, and we are confirmed in this opinion by the action of the learned circuit judge who saw the witnesses and heard their testimony.

The decree is affirmed, with costs.

Ostrander, Moore, Carpenter, and McAlvay, JJ., concurred.


text:
    MOTT v. PENOYAR.
    1. Contracts — Breach—Action—Evidence—Sufficiency.
    In an action for breach of certain contracts by which plaintiff agreed to cut and manufacture the timber on certain lands which defendant represented to belong to him, the breach consisting in failure of defendant’s title to the land, evidence examined, and held, that there was sufficient testimony, if believed, to go to the jury on the issue how much timber was cut under the several contracts before plaintiff was stopped by the owner of the lands.
    2. Same — Action—Accrual—Damages.
    Where defendant employed plaintiff to cut and manufacture the timber standing on certain lands, which defendant falsely represented belonged to him, plaintiff was entitled to damages for the breach of the contract, and the amount of timber cut before plaintiff was stopped by the owner of the land was an element of the damages to be considered, regardless of the terms of the contract as to the time of payment.

      3. Harmless Error — Admission of Evidence — Facts Otherwise Established.
    In an action for damages for breach of a contract by which plaintiff was employed by defendant to cut the timber on certain lands, which defendant falsely represented belonged to him, the allowance of improper questions to defendant’s superintendent, on cross-examination, as to statements made by him to the effect 'that defendant did not own the land, was not hurtful where it was otherwise conclusively proved by competent testimony that defendant did not own the land.
    4. Contracts — Breach—Action—Evidence—Admissibility.
    In an action for breach of a contract by which plaintiff was employed by defendant to cut the timber on certain lands, which defendant falsely represented belonged to him, the rejection of certain title deeds and bills of sale, which defendant claimed would establish his title to a part of the lands, was not error, there being no claim of title to the whole.

      8. Same — Good Faith.
    The papers were not admissible as tending to show defendant’s good faith, since good faith would not relieve him from the consequences of his want of title.
    6. Trial — Instructions—Sufficiency.
    An assignment that the court erred in not instructing the jury that there could be no recovery under items 3 and 5 of the bill of particulars is not supported where it appears that the court instructed as to what items in the bill they might consider, and items 3 and 5 were not among them, and the court said in a discussion in the jury’s presence that such items were not to be considered.
    Error to Iosco; Connine, J.
    Submitted May 5, 1908.
    (Docket No. 70.)
    Decided June 27, 1908.
    Assumpsit by William H. Mott against Wedworth C. Penoyar under section 10421, 3 Comp. Laws. There was judgment for plaintiff, and defendant brings error.
    Affirmed.

      M. L. Oourtright, for appellant.

      Bennett & Moore (William T. Yeo, of counsel), for appellee.
   Hooker, J.

The plaintiff claims to have entered upon the performance of two contracts, one written, the other oral, by which he undertook and promised to cut and manufacture into lumber all of certain kinds and grades of timber, standing upon lands of the defendant, described in said contracts; that after partly performing the same, he discovered that the defendant was not the owner of said lands, and he was prevented from the further performance by the real owner of the lands. He has brought this action alleging deceit and fraud and asking damages, his bill of particulars furnished upon demand of defendant’s counsel being as follows:

“ From May 7th to October 10th, 1905, inclusive:
(1) “ To building lumber camps and roads_____ $200 00
(2) “To moving engines, boilers and mills_____ 800 00
(3) “To loss on materials furnished, camp equipage, lumbering outfits and mills...... 600 00
(4) “Tomoney paid for board and labor of men while idle in consequence of breach of contract---___________________________ 300 00
(5) “ To loss of benefits, gains and profits in favor of plaintiff caused by plaintiff being prevented by defendant from performing said contract as alleged in declaration. _ 7,000 00
(6) “To balance remaining due and unpaid on the lumber cut under verbal contract between plaintiff and defendant as to timber on lands other than those described in written contract____________ 600 00
(7) “To balance due for lumber manufactured from a portion of the lands described in written contract before plaintiff was compelled to discontinue further work under such written contract-.......... 500 00
“Total....................................$10,000 00”

The trial resulted in a judgment for $1,404.75 in plaintiff’s favor. Defendant has appealed.

Points made in defendant’s brief:

“ There being no evidence as to the amount of lumber gotten out under each contract, items 6 and 7, in the bill of particulars should have been withdrawn from the consideration of the jury, and the court should have instructed the jury, under the evidence, that there could be no recovery on either of these items.”

Items 6 and 7 related to balances earned by manufacture of lumber. There was evidence sufficient to go to the jury in relation to this. Some of it consisted of estimates and there was also testimony of inspections. While there was no separation of amounts in the inspections, the plaintiff testified to the maximum amount cut under the written contract, which made the ascertainment of the minimum cut under the oral contract a matter of subtraction merely, if the testimony was believed. It was contended that, under the terms of the contracts, said balances were not due and for that reason the court should have taken items 6 and 7 from the jury. This claim cannot be sustained, for the reason that if the jury sustained the claim of plaintiff upon the second count, he was entitled to damages for the breach of the contract, which right accrued at once, and a balance earned was an element to be considered, regardless of the terms of the contract as to the subject of payment. Hosmer v. Wilson, 7 Mich. 294; Platt v. Brand, 26 Mich. 173; Obenauer v. Solomon, 151 Mich. 570. Some other points are made in this connection, but none that would require the instruction contended for and therefore we do not discuss them.

“The court erred in allowing improper, prejudicial and incompetent questions to be asked regarding statements made by Charles Crawford, defendant’s superintendent, and improper and prejudicial questions to be asked of him. ”

Mr. Crawford was defendant’s superintendent. He was called by the defendant, and on cross-examination he was interrogated about conversations with various persons concerning his knowledge and statement regarding defendant’s want of title, and motives in making the contracts in question. Upon the whole record, including the defendant’s own statements that he did not own some of the land, it is beyond dispute that he contracted for the cutting of timber that he did not own. Hence such cross-examination, and some testimony of the- plaintiff, taken before Crawford was sworn, was not hurtful, even if it was improperly admitted. It was only cumulative testimony upon a point conclusively proved by competent testimony. It may truly be said that the testimony of statements made by Crawford to the effect that he was not surprised at plaintiff being stopped, by the State agent and others, from cutting, for the reason that “defendant did not practically own all the land that the timber was on” might lead the jury to think that defendant did not own the timber, but the consequences of his not owning practically all, would be no more effective as a breach of his contract, than his want of title to a substantial portion of the land or timber. Some of the testimony was properly admitted as res gestee; other parts of it were in the nature of impeachment of defendant’s witness.

“ The court erred in not allowing the defendant to introduce in evidence the tax deeds issued to him or Penoyar Bros, of a portion of the lands described in the contract.”

It is claimed that the defendant had some deeds and bills of sale, which he offered in evidence, and which were excluded. Counsel stated at the time that he wanted them in evidence as the basis of the defendant’s title. They were marked as Exhibits Nos. 13 to 43 inclusive. They are not printed, and we are unable to say from the record that any of them would have tended to show that the defendant had title. But we understand that no one claims that these deeds and bills of sale would have established defendant’s title to all, or substantially all, of the lands or timber, and their introduction would not have justified the claim that defendant had not broken his contract, or that they would have changed plaintiff’s right to treat the contract as terminated, nor would they have affected the measure of damages.

It is also asserted that these papers would have tended to show defendant’s good faith. His good faith would not relieve him from the consequences of his want of title. Again, it does not appear that any of them ran to the defendant, and we discover no showing of competency. Defendant was given the opportunity of showing his good faith by any competent testimony.

“The court failed to instruct the jury that there could be no recovery under items 3 and 5.”

The court instructed the jury as to what items in the bill of particulars they might consider. Nos. 3 and 5 were not among them, and in a discussion of the subject, in the jury’s presence, on the argument relating to requests to charge, the court said that they were not to be considered. We think that the subject was made plain.

“ The court for a number of reasons should have instructed the jury that the plaintiff could not recover.”

We have covered all the points discussed in the brief under this head in what has been said.

It was not error to submit the cause to the jury on the special count.

We find no error, and the judgment is affirmed.

Ostrander, Moore, Carpenter, and McAlvay, JJ., concurred.


text:
    LAETZ v. TIERNEY.
    1. Landlord and Tenant — Chattel Mortgages — Poreolosure —Destruction of Business — Liability of Mortgagee.
    Where a lease gave the landlord the right of re-entry in case of nonpayment of rent, and he also had a chattel mortgage on the stock and fixtures on the premises belonging to the tenant giving him the right on foreclosure to sell at private sale without notice, he was not liable to the tenant-mortgagor for damages for destroying and breaking up his business where, the tenant being in default on both instruments, he went peaceably into the store and suggested that the tenant “give up the ghost,” and on the tenant’s declining to do so without the advice of counsel, and leaving the store to obtain such advice, he locked the door and retained possession for the purpose of foreclosing.
    2. Appeal and Error — Reversal—Nominal Damages.
    A judgment for defendánt will not be reversed where plaintiff could recover only nominal damages in any event.
    Error to Bay; Collins, J.
    Submitted May 7, 1908.
    (Docket No. 120.)
    Decided June 27, 1908.
    Case by John G. Laetz against Peter Tierney and Harry J. Tierney for an unlawful seizure of certain mortgaged property. There was judgment for defendants on a verdict directed by the court, and plaintiff brings error.
    Affirmed.

      George B. Fox {James Van Kleeck, of counsel), for appellant.

      Weadock & Duffy, fqr appellees.
   Hooker, J.

The plaintiff was a saloon keeper doing business in a building leased by him from the defendant Peter Tierney. The lease was in writing and contained a covenant to pay rent and the following provision:

“ Provided, that in case any rent shall be due and unpaid, or if default shall be made in any of the covenants herein contained, then it shall be lawful for the said party of the first part, his certain attorney, heirs, representatives and assigns, to re-enter into and repossess the said premises, and the said party of the second part and each and every other occupant to remove and put out.”

The lease was dated August 5, 1905.

In May or June, 1906, the plaintiff executed and delivered to defendant a chattel mortgage to Secure a debt of $200. It covered the following property:

“One National cash register, six pairs curtains, one kitchen stove, one gas stove, all gas fixtures, twelve chairs, three tables, one desk, all stocks of wines, whiskeys, beer, and other liquors of every kind and description, all glasses, two mirrors, about twelve artificial palms, one clock, and, in fact, all my personal property of every kind and description.”

It contained stringent provisions as to taking possession and foreclosure, with the right to sell at private sale without notice.

Being in arrears both in the rent and the chattel mortgage debt, the defendant called at plaintiff’s place of business and suggested that plaintiff “close up the business,” or, as plaintiff testified:

“He says: ‘You better give up the ghost.’ Isays, ‘No, Harry, I don’t want to give up; if got to close this place up I want to see legal advice first,’ and I went out. He says, ‘ You can.’ I went out, and while I was gone to get legal advice, it took me only half an hour, and not quite that even, the place was locked against me when I came back. Hyman Mitchell was in possession. I had a talk with the Tierneys after that about regaining possession. When I went out to get legal advice from an attorney, I went to Mr. King’s office first in order to get the ’phone to call Mr. Fox; from there I went to Mr. Fox’s office. I returned then directly with Mr. Fox. I made an attempt to try the door and it was barred. When I left there to get advice, I left the bartender, Mr. Hyman; he remained there until the time he was told to get out in the evening; he was in the building when Mr. Fox and I came back and attempted to get in. I went home after that, and I got back and the whole place was locked up and I couldn’t get in at all. I did not tell Mr. Hyman to leave or give up possession. After that Hyman Mitchell and the Tierneys, very likely, remained in possession. The business was closed. It remained closed until the sale, and it was opened again after that, after someone bought it on a private sale; they commenced to use the building I had rented.”

This action was subsequently brought, plaintiff claiming damages against the defendants for breaking up and destroying his business by unlawful acts. The court directed a verdict for the defendants.

Plaintiff claims that the defendants seized and sold the property on the chattel mortgage, and took possession of the store wrongfully and withheld it from him. The undisputed proof shows that the defendants, being lawfully in the store, took possession of the chattel-mortgaged property, bolting the door for the purpose of taking an inventory, plaintiff’s bartender remaining and aiding in taking an inventory until, that being done, he was told by the defendants that he would not be needed longer. The mortgage covered all the personal property belonging to plaintiff and after its seizure, which was rightful, there is nothing to indicate either an ability or desire by the plaintiff to continue the business. It is obvious that he had no right of recovery growing out of the seizure and sale of the property. Under the terms of the lease he had forfeited the right to the possession of the premises, and by his own express covenant the plaintiff had a right to reenter and put him out.

There was nothing in the nature of force in the entry, or in obtaining possession, although there was proof that plaintiff’s lawyer afterwards demanded possession. The plaintiff bases his action on the claim that he had a right to possession, although his own contract shows that he had no such right and that defendant had such a right. The question was passed upon in, and the case is ruled by, our decision in the case of Smith v. Building Ass’n, 115 Mich. 346. See, also, Murphy v. McIntyre, 152 Mich. 591.

Again, the court was correct in saying that no damages, beyond nominal damages, were proven in the case, even upon the plaintiff’s theory, and this would not call for a reversal. Hickey v. Baird, 9 Mich. 38; Haven v. Manufacturing Co., 40 Mich. 286; Lewis v. Railway Co., 56 Mich. 638; Stevens v. Yale, 113 Mich. 680; Wilcox v. Morton, 132 Mich. 64.

The judgment is affirmed.

Ostrander, Moore, Carpenter, and McAlvay. JJ., concurred.


text:
    MARTIN v. VEANA FOOD CO.
    1. Fraud — Misrepresentations—Expressions op Opinion — Inducing Purchase op Stock.
    Representations by the officers of a limited partnership association, to induce the purchase of stock, that there was a constantly increasing demand for the product of the association’s factory, that it had a plant costing about $100,000, that the experimental stage had long since been passed and the basis of assured success well laid, and that the output of the factory was over 1,000 pounds of product per hour, which would show a profit of 35 per cent, on the investment, were not ' mere expressions of opinion, but were statements of fact, for which, being false, an action lies.

    2. Same — Liability.
    Though one may, without legal liability for results, permit another, for a consideration, to share his hopes, however adroitly the statement of his hopes may be phrased, he may not by actual misstatement, without liability, induce the belief that the venture is without other risk than the usual risk of an established and prosperous business.
    283
    3. Same — Evidence—Admissibility.
    In an action for fraud in induoing plaintiff to purchase shares in a limited partnership association as a part of the consideration for his appointment as district manager under a contract contemplating his sale of 300 cases of goods per month, evidence was admissible tending to show that it was impossible or unlikely that a manager could sell the amount specified.
    Error to Eaton; Smith, J.
    Submitted May 7, 1908.
    (Docket No. 108.)
    Decided June 27, 1908.
    Case by Louis H. Martin against the Veana Food Company, Limited, and others, for fraud and deceit. There was judgment for defendants on a verdict directed by the court, and plaintiff brings error.
    Reversed.

      Stewart & Sabin, for appellant.

      Garry C. Fox (Moore & Moore, of counsel), for appellees.

       As to expression of opinion as fraud, including question what constitutes expression of opinion, see note to Hedin v. Minneapolis Medical, etc., Institute (Minn.), 35 L. R. A. 417.

   Ostrander, J.

Plaintiff, on September 30, 1904, purchased from defendant association, at par, and paid for, $1,000 of its capital stock. Later, in December of the same year, he asked the association to take his stock and repay him his money.- This it did not do. His action is for damages for fraud and deceit. At the trial, plaintiff having closed his case, the court directed a verdict for defendants and judgment was entered on the verdict. The errors assigned make it necessary to determine whether, upon that view of the testimony, admitted or wrongly rejected, most favorable to plaintiff, there were questions which should have been submitted to the jury. The defendant association was organized March 10, 1902, with a capital of $500,000, in shares of one dollar each. Ten thousand dollars in cash was paid in by ten men, each of whom received $25,000 of stock. Of the $350,000 of stock represented as paid, the remainder was first given, or paid, for a formula for making flaked goods. Of this, 68,000 shares, and perhaps a greater number, were after-wards turned in to the treasury. Various persons purchased stock at from 10 to 25 cents a share to the amount of $9,925. A factory was built at an expense of $47,000, money for this purpose being borrowed as was necessary. Manufacture of food was begun in May or June, 1903. On September 1, 1904, the association was overdrawn at the bank $10,820.71, and had a total indebtedness apparently of more than $34,000. Sales of stock were made, at par, to persons appointed district managers, to the amount of $51,325. Plaintiff’s connection with the association is best shown, though at the expense of considerable space, by the following recital and by documents, copies of which are given. He was employed at Aurora, Illinois, when he read in the Scientific American, in its issue of September 3, 1904, the following advertisement:

“ Reliable man wanted. A prominent cereal food company will contract with thoroughly reliable man for two years at $150 a month, together with commission and officb expenses. Highest references required. Address, ‘Auditor, Box 475, Bellevue, Mich.’ ”

Plaintiff wrote to the address and in reply received a letter from defendant company, inclosing a prospectus. The following is the letter:

“ J. R. Hall, Chairman, T. E. Robinson, Secretary
“F. M. Mulvaney, Treasurer. and Gen’l Man’gr.
“The Veana Food Co., Ltd.
“ Manufacturers of Veana Flaked Cereal Food.
“Bellevue, Mich., Sept. 13, 1904.
“L. H. Martin, Aurora, Ill.
Dear Sir: Your valued favor of recent date in reply to our advertisement has been received and filed; replying to same, we will endeavor to give you a brief, yet intelligent, idea of the situation, and then if interested we will take the matter up with you in detail. We are engaged in the manufacture of ‘Veana Flakes,’ — undoubtedly the acme of perfection in the cereal food line; there is a constantly increasing demand for our product, and in order to afford better facilities for the handling of our goods we have decided to open several branch offices or distributing depots, and are now in search of competent men to take charge of same. We have recently adopted the co-operative system of doing business, and believe that our best employes, who hold responsible positions with us, should participate in the profits they help to make.
“Our company is incorporated under the laws of the State of Michigan with an authorized capital of $500,000. At a recent meeting of the board it was decided to set aside $100,000 worth of stock, which is to be offered until Jan. 1, 1905, to our branch office managers in blocks of from 1,000 to 5,000 at par one dollar per share, which must be paid for in cash at the time of closing contract; we do this for the reason that our experience and that of other well-known concerns has proven beyond doubt that when a man has a financial interest in the company he represents, he puts forth a much better effort than were he merely an employé; therefore, in order to secure the best possible results from our branch office managers we deem it imperative that our trusted employes be financially interested with us.
“ Our proposition is not made through philanthropic motives, but is based upon purely business principles, and we court from those who are in a position to meet the requirements the closest investigation.
“ To put the entire proposition to you in a nutshell, we want as branch office managers men of ability to interest themselves with us financially, morally, and commercially, with a view of producing by concentrated effort the best results possible. The minimum investment that can be made by our branch office managers with us is $1,000 and the maximum $5,000, and with men of whom we approve we are prepared to close a two years’ contract at a salary of $1,800 per annum payable monthly, and ten per cent, commission on the business done through his territory except the first 300 cases per month, also fifty cents per case on all goods sold by his individual efforts, so that a hustler ought easily to make $5,000 per year. In addition he will receive the dividends accruing to his stock, which is fully paid and non-assessable; we will rent and furnish at our own expense, office quarters and warehouse facilities. We are thoroughly established, have a plant which stands alone in its class, both from architectural and mechanical engineering standpoints, which has cost about $100,000, will produce daily 600 cases of better food at a lower price and consequently at a higher profit, than any factory yet built. Our entire proposition is co-operative, it being, as we have stated before, our firm belief that concentrated effort will bring results obtainable in no other way.
“The duties of a manager will be to secure, employ, and superintend a force of local and traveling salesmen to cover the territory which we assign him; in short, he is to have general control of, and supervision over, the business of his department, and to handle same as though it were his own; if a man has managerial ability and will follow our instructions he can readily adapt himself to our business. The credits and collections will all be handled from the home office so that a man can give his undivided attention to the sale of our goods.
“If you are interested from what we have told you of our proposition, you can secure from either Dun or Bradstreet our rating, also the very best banking references and other evidence of our standing, and we shall expect equally as good references from the man who wishes to take up and expects to fill so important a position as that of branch office manager of this company. If you feel that you are in a position to meet with all the requirements as outlined, and would like to go into the matter in full detail, write us — but do not simply ask for details— make your questions specific and right to the point.
“We shall also be pleased to hear from you at an early date, giving us your references and a brief statement relative to your experience, in order that we may ascertain if you are the man we are looking for.
“ Hoping that we may be favored with a prompt reply, we beg to remain,
“Yours respectfully,
“The Yeana Food Co., Limited,
“T. E. Robinson.”
The prospectus:
“The Yeana Food Company, Limited,
“Capital Stock, $500,000.
“Bellevue, Michigan.
“Officers.
Chairman, J. R. Hall,
“Treasurer, F. M. Mulvaney,
“Secretary and General Manager, T. E. Robinson.
“Prospectus.
“The Yeana Food Company, Limited, having profited by tbe experience of all other large food plants, has today the finest and best equipped food plant in Michigan, if not in the world; not the largest or most elaborate, but the most complete; in fact, a perfect plant. While most of the food companies handle their product in a very crude and expensive manner, the Yeana Food Company will not lay a hand on its product from the time it enters the hoppers until it comes out in cartons. Nothing has been left out and no modern idea overlooked.
“Unless one has' given thought and attention to the cereal food business, the rapid growth and fortunes that have been made in it read more like some tale of enchantment from Arabian Nights. A volume could be written on the subject, but we cite only two instances: one manufacturer began seven years ago in a barn in Battle Creek, with scarcely a dollar of capital — in fact, had to borrow money for the purpose, and his advertising was done on credit; now he is a multimillionaire and the sales of his factory in 1902 were over $4,000,000, after spending $600,000 in advertising. Two years ago the stock of another company went begging at 17 cents on the dollar — it is now worth twelve and one-half times par value, and the company is incorporated for several millions. It might be well to state right here that the remarkable growth of Battle Creek during the past two years is directly attributed to these two food companies, —over two thousand houses having been built in a single year.
“After careful investigation of the co-operative system now in use by the Carnegie Steel Co., the National Cash Register Co., Proctor & Gamble, Sir Thomas Lipton (the world’s greatest tea merchant), et al., it has been found that the phenomenal success of these well-known concerns was attributed largely to co-operation, and clearly demonstrated the merit of the system; therefore on June 1, 1903, the Yeana Food Co., Ltd., decided to adopt the cooperative system, and there can be no question but that by giving their branch office managers an active and financial interest in the business, it will undoubtedly distance all competitors in a very short time, and secure results not obtainable by any other means. Not only is it gathering about itself a small army of gallant workers who-stand shoulder to shoulder, all working together for the good of the whole, but it has made it possible for them quickly and radically to better their own fortunes. Should any one of our branch office managers start in business for himself with a capitab of $1,000 or even $5,000 he would cut little figure in these days of competition— we do not care what line he selected, nor in what town he located; but by joining hands with us, he not only has the advantage of many thousand dollars, but of the full-fledged factory besides.
“The food situation of today is past the speculative stage, it having proven itself the best investment of the day. The truth of the statement can be easily verified by consulting the mercantile agencies in regard to food investments during the past three years.
“ In order to appreciate the value of our earning capacity, it should be remembered that we have an output of over 1,000 pounds an hour of chemically pure food, which will show a net profit of thirty-five per cent, on the investment. The success of this company is not a matter of speculation, for two very important reasons: First, this is a cereal food age in which the public with increasing discrimination demands cereal foods, selects and continues to use that which is best, and to make rich the men who manufacture and market it. Second, the men at the head of this company thoroughly understand this business in every detail; having demonstrated that it can and does produce an article of superior merit; in fact, the experimental stage has long since been passed and the basis of assured success well laid.
“ In addition to our food plant we have installed a 3,000 light generator for the purpose of furnishing light and power for Bellevue, the company having already secured a five-year contract and thirty-year franchise. The electric light plant will be operated without any additional cost of labor, as the same engineer corps will run both plants. This is of tremendous import to the average stockholder or prospective investor in the Veana Food Co. The lighting plant will not only increase the company’s revenues but will vastly help to make it independent.
“It is the purpose of this company to establish one branch office in each State in the Union for the sale and distributing of Yeana Flake Food; placing in charge of same men of sterling integrity and business ability. We are in need of good, reliable men, and those who can properly qualify need never look further for employment.”

Plaintiff visited Bellevue, went over the plant of the company, and, as has been stated, he purchased 1,000 shares of stock and entered into the contract indicated by “ the correspondence. The testimony tends to prove that defendant Robinson said the business was in a prosperous condition; that some of the agents were very successful and others not as successful; that there had been invested in the business from $100,000 to $125,000; that the business was successful and was paying about 30 per cent. . Nothing was said about the indebtedness of the company, and no inquiry made concerning it. The testimony further tends to prove that whatever hopes may have been entertained by the promoters of this association, it was not, when plaintiff purchased his stock, conducting a successful business, was not prosperous, was not solvent. The product it manufactured was without any considerable reputation in a market where competition was swift and sharp, and, except that it was an organized concern with a plant for manufacturing a flaked food and had to some extent, by advertising and in other ways, exploited its business, it had nothing to offer to any purchaser of its stock except a place in an adventure, the history of which was not, especially in the absence of large sums available for advertising, prophetic of final success. . It did, in fact, fail of success.

It must have been expected that plaintiff would rely upon the representations, first, that there was a constantly increasing demand for the product; second, that there was a plant which had cost about $100,000; third, that the experimental stage had long since been passed and the basis of assured success well laid; fourth, that—

“In order to appreciate the value of our earning capacity it should be remembered that we have an output of over 1,000 pounds an hour of chemically pure food, which will show a net profit of thirty-five per cent, on the investment.”

These are not mere expressions of opinion and do not relate to immaterial matters. When these printed representations were followed by the express oral statements of officers of the company to the effect already stated, it cannot be said that the plaintiff and the defendants were dealing on even terms, that deceit, with or without malice, was not practiced to the injury of plaintiff.

The testimony of the secretary and general manager is:

“We felt the need of money at that time; we were like most anybody, we need money all the time. April 30, 1903, at the time of this meeting [when the plan was authorized], was before we began to manufacture our product; that was just when we were finishing our mill. We found ourselves in need of money and an output of our product.”

At different times, some 50 agents or district managers were appointed after purchasing stock. Some of them had contracts requiring them to sell no more than 200 cases each month and it appears that failure to sell this amount did not in every case deprive the manager of his salary. The same witness further testified concerning his interview with plaintiff, which, as we have seen, was in 1904:

“And I told him we had a good plant, we had a good food; that we were working most of the time; that some of our managers were good and some were not so good; that we did not want any dead ones, that we wanted live ones, and for the man that was a live one we had a good proposition ; and told him that the territory, in order to make the office pay expenses in good shape, should furnish 300 cases a month; and I told him that he or anyone else that didn’t think they could sell that, that we didn’t want them; that we had had some that had fallen down and weren’t any good; and I marked out to him on a paper there how he could — what the sale of 300 cases would mean, $150 a month and his commission would start on over and above the 300 cases and 50 cents per case on his own individual efforts. That was about the limit of the conversation that I had with him. Mr. Hall was there and he was in his company a good share of the time after that.”

Coupled with the statement that the business was prosperous, this was a direct representation that a good manager ought to secure sales of 300 cases per month, and more. It was both an inducemeiit to buy stock and a representation of its value. Undoubtedly, one manager of the sales of goods will excel another manager in the same territory, but at this time (1904) the defendant company and its officers had had an experience of more than a year in the sale of their product and had employed various managers in various States. The same witness testified :

“The first year we were at it we did very little; we went at it in a very mild way, and then the next year the market was flooded with so many kinds of foods and the quality was such that complaints came in from our customers and the like of that that the stuff was not moving, and I should say that was in 1904, some time, the summer and fall, perhaps. Very soon after we started we found there was competition and very strong. We finally found it became very fierce. The competition was quite strong. The demand fell off some and shortened up in the winter months of 1903 and 1904, and then again in the fall of 1904 and 1905. It wasn’t pleasant, lots of it. We were selling some, but not a great deal. We figured out a profit in the goods provided we could sell them.”

Plaintiff was not given an opportunity to try to sell the goods before investing in the stock. If, therefore, in the experience of the company no manager had ever been able to sell 300 cases of the food per month, the offer made to plaintiff to sell him the stock at par upon such conditions, coupled with the statements of the general manager, and the representations of the prospectus, was a misrepresentation. The argument that defendants had the right to enter into such contracts with agents as it, and they, pleased, that if plaintiff and other managers had performed their contracts the salaries could have been paid and the stock would have been valuable, that in the absence of actual bad faith defendants should be held innocent, is not convincing. There is testimony tending strongly to prove the honest belief of defendants in the ultimate success of the enterprise. Undoubtedly, one may, without legal liability for results, permit another, for a consideration, to share his hopes, however adroitly the statement of his hopes may be phrased. He may not, by actual misstatement and without liability, induce the belief that the venture is without other risk than the usual risk of an established and prosperous business. The claim of plaintiff is that defendants represented as actual that which they hoped might become actual; that he paid his money, relying upon the representations. "We are of opinion that it cannot be said, as matter of law, that plaintiff is entitled to no relief.

What has been said disposes of most of the alleged errors. Under the circumstances, plaintiff should be permitted to show, if he can, that it was impossible or unlikely that a manager could perform his contract to sell 300 cases of the food each month. Other questions presented are not likely to arise upon a new trial.

The judgment is reversed, and a new trial granted.

Hooker, Moore, Carpenter, and McAlvat, JJ., concurred.