author: Grant, C. J.

text:
    WILSON v. WRIGHT.
    Trusts — Arbitration Agreement — Settlement — Promissory Notes — Transfer After Maturity.
    Defendant agreed to hold certain money in trust, pending a decision by arbitrators as to whether it should be paid to complainant or to the holder of a specified promissory note. The arbitration failed, and defendant made a full settlement with the holder of the note, who was prima facie entitled to the fund, and was by him released from all liability. Complainant afterwards purchased the note, which was then past due, and filed a bill to establish his right to the fund. Held, that he had made no case.
    Appeal from Saginaw; Wilber, J.
    Submitted February 4, 1898.
    Decided March 29, 1898.
    Bill by Charles M. Wilson, receiver of the First National Bank of Mt. Pleasant, against Ammi W. Wright and others, to enforce an alleged trust. From a decree dismissing the bill, complainant appeals.
    Affirmed.

      The bill in this case was filed to enforce a trust based upon the following instrument.
    “Mt. Pleasant, Mich., July 9, 1889.
    ‘ ‘ Por a valuable consideration to us paid, we agree with the First National Bank of Mt. Pleasant, I. A. Fancher, John A. Harris, P. F. Dodds, F. W. Carr, and P. S. Fancher, to hold the sum of $2,447.90, to await the result of the arbitration now pending between Leaton & Upton and William N. Brown and Brown & Leaton, and, if the finding of the arbitrators be in favor of Leaton & Upton, we agree to pay said sum of money, or so much thereof as may be necessary, to retire the following described notes now held by said bank, viz.: One-half note, January 17,
    1889, made by P. S. Fancher, and indorsed by I. A. Fancher and F. W. Carr, $1,000; one-half note, December 15, 1888, made by I. A. Fancher, and indorsed by D. Scott Partridge, $500; and one note July 9, 1889, by I. A. Fancher and John A. Harris, and indorsed by P. F. Dodds, $2,107.22.
    “Wells, Stone & Co.,
    “Per Sharp.”
    Contemporaneously therewith, or a few days previous, an agreement of arbitration had been signed by the parties mentioned in the above instrument.
    The'bill sets forth these instruments, and further alleges that the firm of Leaton & Upton, which was engaged in lumbering, became financially embarrassed, and transferred all its property to I. A. Fancher, as trustee; that Fancher, as trustee, conveyed certain lands to the firm of Brown & Leaton for $36,000; that this money was obtained from Wells, Stone & Co., and was to be applied in payment of balances due upon contracts of Leaton & Upton, and to certain indebtedness of Leaton & Upton held by the Commercial Bank, by complainant, and other small creditors; that Brown & Leaton at the same time, by deed, conveyed the lands to Wells, Stone & Co., to secure them for the loan of $36,000; that Wells, Stone & Co. paid a part of the indebtedness due complainant, and the entire amount due said Commercial Bank, from Leaton & Upton, except two notes, the subject of this controversy. The bill then sets forth the controversy as to the items involved in these notes. Leaton & Upton claimed that one item was a note made by them for the accommodation of Brown & Leaton, who ought to pay it. Leaton & Upton also claimed that Brown was indebted to them for lumber sold; that this indebtedness was once represented by a draft, drawn by Leaton & Upton upon Brown, which he failed to pay, and was afterwards included in a note of Leaton & Upton to the Commercial Bank. Lea-ton & Upton claimed that these two amounts should be allowed them, and paid by Wells, Stone & Co. out of the $36,000. It is alleged that it was agreed by Leaton & Upton, Brown & Leaton, William N. Brown, Wells, Stone & Co., and the Commercial Bank that the dispute about such liability should be submitted to arbitration; that Wells, Stone & Co. should retain in their hands the sum of $2,447.90 pending such arbitration, and should pay to complainant such sums as should be found thereby due to said Leaton & Upton* from Brown & Leaton and from Brown; that the arbitration failed, and nothing was accomplished under it; that these two notes were held by the Commercial Bank, and, at the request of said bank, were renewed by giving two other notes; that, subsequently, Stella G. Leaton became the owner of one of said notes, and one Minnie K. Brown the owner of the other; that complainant purchased said notes on January 31,1895, of Mrs. Leaton and Mrs. Brown, and thereby became the owner and entitled to the proceeds of the same; that said sum of $2,447.90 still remains in the hands of Wells, Stone & Co. in trust for the payment of said indebtedness. The prayer is for a decree against Mr. Wright, the survivor of Wells, Stone & Co., for the amount of this fund.
    The answer of Mr. Wright denies any trust relation or any participation by Wells, Stone &Co. in the transaction between* Leaton & Upton, through Fancher, trustee, and Brown & Leaton, except that they agreed to loan Brown & Leaton the money necessary to make their contemplated purchase from Leaton & Upton, and did so, taking security from Brown & Leaton therefor; that because of Mr. Wright’s interest as president and a stockholder in the Commercial Bank, which had a large amount of Leaton & Upton paper, and the representation of Brown & Leaton, among other things, that such paper should be taken up out of the proceeds of such loan, Wells, Stone & Co. were induced to make the loan, and were desirous of having the money loaned by them paid out in such manner as would secure the release of Leaton from Leaton & Upton indebtedness, and in having the Commercial Bank relieved of the Leaton & Upton paper, and that, in marking such payment, Wells, Stone & Co. only acted under the direction of Brown & Leaton, and as agents of Brown & Leaton, and did not undertake or assume any responsibility for the application of the money, or put themselves under any obligations to any other persons than Brown & Leaton, and, so acting, paid out to and for Brown & Leaton even more than the amount which they had agreed to loan. Mr. Wright admits on information and belief that a dispute arose between William N. Brown and Leaton & Upton relative to two notes made by Leaton & Upton, and held by the Commercial Bank, amounting to $2,447.90, but denies that Wells, Stone & Co. were in any way parties to the arbitration agreement, and says that such arbitration was never acted upon, and has been abandoned, and, as to the alleged agreement claimed to have been made by Wells, Stone & Co. per Sharp, that he has no knowledge about it, and that Mr. Stone, who would have had knowledge upon that subject, is dead, and he neither admits nor denies the agreement, but leaves complainant to its proof thereof. He denies that any sum remains in the hands of Wells, Stone & Co. in trust for the payment of Leaton & Upton’s indebtedness to complainant, or that they should account to complainant for, or pay it, any sum. He avers that in May, 1894, acting for Wells, Stone & Co., he made full settlements with the Commercial Bank, and with Brown and Leaton and their wives, Minnie K. Brown and Stella G. Leaton, and took full and complete releases from them, and that, at the time of such settlement, the renewals of the two notes, aggregating $2,447.90, the subject of the dispute between Brown and Leaton & Upton, were still owned by the Commercial Bank, and were covered by the releases then given, so far as any claim thereon against Wells, Stone & Co. is concerned, and that, if complainant has such notes, it obtained them after such date as dishonored paper, and has no rights thereunder as against Wells, Stone & Co. He also avers that complainant has omitted necessary parties in not making William N. Brown and the representatives of Mr. Leaton parties defendant, and prays benefit of demurrer.
    Proofs were taken in open court, and the bill dismissed.

      John E. More, for complainant.

      Gilbert M. Stark, for defendant Wright.
   Grant, C. J.

(after stating the facts). This bill was filed by the First National Bank before a receiver was appointed, and the bank will be treated in this opinion as the complainant. The bank insists that this is a trust fund, to which it is entitled as the owner of the notes. Defendant Wright insists upon the correctness of the decree for the following reasons:

1. That there is no evidence to prove the authority of Sharp to sign the alleged agreement for Wells, Stone & Co.
2. That the bill is defective for omitting necessary parties, viz., Brown and the representatives of the estate of Leaton, deceased.
3. That it is not a trust fund.
4. That the First National Bank took these notes after they were past due, and therefore subject to all equities and defenses which Wells, Stone & Co. would have as against the original holders.

Wells and Stone died before this bill was filed. Defendant Wright is the surviving member of the firm. Leaton & Upton were indebted in about $72,000, of which there was due to the Commercial Bank about $20,000, and to the First National Bank about $9,000. Mr. Wright was the president and the largest stockholder of the Commercial Bank, and insisted upon the payment of Leaton & Upton’s indebtedness to it. Judge Moore, of Saginaw, was the attorney for Wells, Stone & Co., negotiated the transaction, and drew the contract between the parties. He, in behalf of Wells, Stone & Co., insisted that Mr. Leaton should he absolutely discharged from all liability for the debts of Leaton & Upton, and informed Mr. Fancher and the other parties that Wells, Stone & Co. would have nothing to do with any disputes between Leaton & Upton and Brown & Leaton and Brown as to their liability on the disputed notes, and would only make this loan on condition that Mr. Leaton should be absolutely discharged. This was evidently assented to. Discharges were executed, and $16,595.54 was paid to the Commercial Bank, and $6,396.83 to the First National Bank, by Wells, Stone & Co., each bank making a rebate in order to carry out the arrangement. The other creditors formed a syndicate, took other lands in payment of the debts due them, and released Leaton. By the agreement between Brown & Leaton and Wells, Stone & Co. for the loan of this $36,000, Brown & Leaton agreed to cut and manufacture the logs upon these lands into lumber, and turn the proceeds over to Wells, Stone & Co., in payment of the loan and for advances which they had agreed to make. Brown & Leaton appear to have run behind, and to have become indebted to Wells, Stone & Co. in an amount much greater than the $36,000. On May 15, 1894, they made a settlement, which was signed by Brown and Leaton and their wives, by Mr. Wright, and the executors of the last wills and testaments of Mr. Wells and Mr. Stone. This settlement was sweeping in its provisions, including all actions, causes of action, suits, debts, claims, and demands, in law or in equity, which said first parties, and each of them, had against Wells, Stone & Co., and the latter released and discharged Brown & Lea-ton from all indebtedness to them. On May 16, 1894, the Commercial Bank executed a release to Wells, Stone & Co. and said Wright and the several estates of Wells and Stone from all claims and demands of every kind growing out of said agreement of July 8, 1889, and also another agreement which bore date January 12, 1889. When these settlements were made, the bank delivered to Mrs. Brown and Mrs. Leaton notes to the amount of $38,000, including the two in question. The title to some of this land conveyed to the bank under the settlement stood in the names of Mrs. Brown and Mrs. Leaton. Brown & Leaton negotiated the arrangement by which these notes were delivered. Afterwards Mrs. Brown transferred the note to the First National Bank, the sole consideration being the release of her husband from all the paper at the bank of which he was either indorser or maker. Brown at that time was insolvent. The release of Mr. Leaton upon similar notes was the consideration for the transfer by Mrs. Leaton of the note she held, Mr. Leaton also being insolvent.

Under this state of facts, we think there are two complete answers to the complainant’s case:

1. The settlement of May 15, 1894, was signed by Mr. Brown, Mrs. Brown, Mr. Leaton, and Mrs. Leaton, and settled all transactions between them and Wells, Stone & Co. The settlement with the bank on May 16, 1894, recited the settlement between Brown & Leaton and Wells, Stone & Co., the transfer of certain lands to the bank, and the bank, in consideration thereof, released and discharged Wells, Stone & Co. By this settlement, Brown, Leaton, and their wives released Wells, Stone & Co. from all liabilities, which included all claim to this fund which Brown and Leaton, or either of them, ever had. They made no reservation of this claim, and as to them it was settled and disposed of. They could not revive the claim by having the notes transferred to their wives by the Commercial Bank. Evidently, the bank considered Brown & Leaton insolvent, and released them from liability on the notes they held against them, and surrendered them. It was of no consequence to whom they were transferred by the, bank.

2. If it be conceded that this fund was retained for the purpose stated, complainant has not shown that it was entitled to it. By the terms of the paper signed by Sharp, Wells, Stone & Co. were only under obligation to pay the money to' the holder of the notes if it should be determined that Leaton & Upton ought to pay them. As we understand the situation, Leaton & Upton were parties to the notes, and under legal obligations to pay to the then holder, the Commercial Bank; but it was insisted that equitably, and as_ between Leaton & Upton and Brown & Leaton and Brown, the latter should pay, and that was the question submitted to arbitration. That question has not been determined. There is no evidence in this record by which we can determine it. If it belonged to Brown & Leaton and to Brown to pay them, they have been more than paid by Wells, Stone & Co., and they have settled it. Neither Brown nor Leaton nor their wives could recover against Wells, Stone & Co., and, if they could not; neither can their transferee, the bank, which purchased after due.

It is unnecessary to discuss the other questions raised. The decree is affirmed, with costs.

The other Justices concurred.


source: Caselaw Access Project

author: Montgomery, J.

license: Public Domain

text:
    AYRIS v. AYRIS.
    Deeds — Conditional Delivery — Evidence.
    A finding that a deed, claimed by the grantor to have been delivered upon the understanding that it should be withheld from record until his death, was recorded with his full consent, is justified, where it appears that he knew of the recording at the time, but made no objection for seven years, during which time he continued in possession of the premises under a life lease from the grantee.
    Appeal from Wayne; Frazer, J.
    Submitted February 2, 1898.
    Decided March 29, 1898.
    Bill by John Ayris against Henry Ayris and others to set aside certain deeds. From a decree dismissing the bill, complainant appeals.
    Affirmed.

      Oscar M. Springer, for complainant.

      Jasper G. Gates, for defendants.
   Montgomery, J.

The bill in this case was filed by John Ayris against his sons, Henry, Frank, Allen, and Charles, and their wives, to set aside three several deeds of conveyance, executed, respectively, to Henry, Frank, and Allen, made and dated November 17, 1881, whereby complainant conveyed to each of them, severally, one-third of his homestead, consisting of 80 acres, situate in the township of Greenfield, Wayne county, Mich. The grounds upon which the relief is sought are (1) that it was understood when the deeds were delivered that they would not be recorded until complainant’s death; (2) that the consideration of the deeds was that the grantees should stay at home with complainant, and work his farm, without compensation, except their board and clothes, during the period of complainant’s life, and that this they had each and all refused to do; (3) that Allen and Frank left complainant soon after the execution of the deeds, but Henry remained with him for a period of nine years, during which time he shamefully treated complainant, keeping him in fear of personal violence, attempting to poison him, leaving him to care for himself, stripping him of all his property, and finally deserting him in January, 1895. Defendants answer, admitting the making of the deeds, and insisting that the deeds were delivered unconditionally, and were intended to be absolute transfers of the title; denying any agreement on their part that they would work for complainant as alleged; denying all ill treatment of complainant by Henry, and insisting that he had always treated complainant with kindness, and had cared for and supported him in a proper manner until complainant compelled him to leave the land in question in January, 1895.

On January 11, 1877, complainant made and executed his will, whereby he devised this property to his sons Henry, Frank, and Allen, just as he afterwards conveyed it to them by these deeds. When these deeds were executed, they were delivered in escrow to Walter Henderson, who appears to have been complainant’s confidential adviser, with the understanding that they were to be delivered to the grantees on complainant’s death. Mr. Henderson died in February, 1888, with these deeds in his possession. Thereupon his son, Edwin Henderson, returned the deeds to complainant, who thereupon delivered them to his sons. Henry, Frank, and Allen made life leases of the portions of the land conveyed to them, respectively, running to complainant, which leases were delivered to, and retained by, complainant.

The claim is made that the deeds were delivered with the understanding that they were not to be recorded during the life of the complainant; but the evidence preponderates in favor of defendants on this point. Complainant admitted that he knew of the record at about the date thereof, in 1888, and apparently was satisfied that his rights were fully protected by the life leases until near the time of filing this bill, in 1895. This fact strongly corroborates the testimony of defendants that the record of the deeds was made with complainant’s full assent. Furthermore, the bill of complaint avers “that, at the time said deeds were given, it was understood and agreed between your orator and his said sons that from that time your orator’s interest in said lands was and should be a life lease of the same.”

The consideration for the deeds was stated to be the sum of one dollar, and for working and caring for him (grantor) in his old age. It is claimed that this constituted a condition, and that defendants have not worked and cared for complainant. At the time the deeds were prepared, it was not intended that they should be delivered until the decease of complainant. As before stated, they were left in the custody of. Mr. Henderson with that purpose. It was intended that the sons were to remain on the farm with their father, and render such services as are usual under such circumstances, furnishing a home for him. When the deeds were delivered and the life leases taken, the intention, doubtless, was to secure the complainant in the control of the property. • The sons, or some one of them, continued to live on the farm and care for complainant until 1895. Then trouble arose. Complainant conceived that an attempt had been made to poison him, and this naturally resulted in the breaking up of the household, complainant leaving the premises. Henry afterwards left the premises, and complainant has since leased them to Allen.

The case really turns on the question of whether the defendants were in fault, or whether complainant rightly accused Henry and his wife of attempt to murder. There was testimony tending to show neglect and unkind treatment of complainant, but the circuit judge, who saw the witnesses, was evidently impressed that these complaints were not well grounded; and the alleged attempt to poison complainant is fully disproved. We do not find the testimony in support of complainant’s case sufficiently convincing to justify us in reversing the decision of the circuit judge.

The decree will be affirmed, with costs.

The other Justices concurred.


text:
    HITCHCOCK v. FRACKELTON.
    1. Promissory Notes —Irregular Indorsement — Parol Evidence.
    In an action upon a promissory note by the payee, parol evidence is admissible to show that the defendant, who indorsed the note before delivery, was, as between the maker and himself, a surety, and that the payee had 'knowledge oí the fact.
    2. Same — Extension oe Time — Release oe Surety.
    Evidence that a sum equal to the interest on a note for 90 days was accepted by the payee in advance from the maker, and that a notice that the note would fall due at a date three months later than the 'original date of maturity was sent out by the payee, is-competent to show that the time of payment was extended and the surety thereby released.
    3. Trial — Judgment—Discontinuance.
    By proceeding to judgment against one of several defendants, who alone was served, plaintiff elects to discontinue as to the others.
    4. Joint Debtors — Judgment—Merger.
    A judgment in form against all of a number of joint debtors, one of whom only was served, does not constitute an extinguishment of the debt, so as to bar a subsequent action thereon.
    5. Promissory Notes — Judgment—Bar—Conflict of Laws.
    Under the laws of Minnesota, the maker of a promissory note, and a third person indorsing the same before delivery, stand in the relation of joint and several makers of the note, and a judgment against one is no bar to an action against the other; which rule will be applied in determining the rights of the several parties under a note executed, delivered, and made payable in that State.
    Error to Genesee; Wisner, J.
    Submitted February 3, 1898.
    Decided March 29, 1898.

      Assumpsit by Allison L. Hitchcock against David S. Frackelton and others upon promissory notes. From a judgment for plaintiff, defendant Frackelton brings error.
    Reversed.

      Clarence Tinker, for appellant.

      Bowen, Douglas & Whiting, for appellee.
   Montgomery, J.

This was an action commenced by declaration on the part of Allison L. Hitchcock, as nominal plaintiff, the actual plaintiff being the Security Bank of Minnesota, on three promissory notes, against the defendants nominally, but against David S. Frackelton as the only one served, upon his irregular indorsement on the back of said notes. The indorsement of defendant Frackelton was made on the back of all the notes before delivery, and the consideration for the notes for which they were renewals was placed on the books of the Security Bank of Minnesota (the actual plaintiff herein) to the credit of the Price Condit Fence Company, the maker, and by the Price Condit Fence Company checked out of said bank, and used in its business, defendant Frackelton receiving none of the consideration for any of said notes, which fact was known to the bank. Upon the 14th day of November, 1890, a suit upon these three notes was begun in the district court for Hennepin county, Minn., by the Security Bank of Minnesota against the Price Condit Fence Company, George F. Porter, D. S. Frackelton, and Ambrose W. Daynes. July 6, 1891, plaintiff took judgment against the Price Condit Fence Company alone, for the sum of 114,292.65, which judgment was duly docketed on that date. On July 29, 1891, an execution on said judgment was issued against the property of the Price Condit Fence Company, and indorsed by plaintiff’s attorneys, and placed in the hands of the sheriff of Hennepin county, Minn. Upon the 6th day of August, 1891, the said 'sheriff made his return of the said execution unsatisfied.

The present suit was started in the name of Allison L. Hitchcock, in the Wayne circuit court, December 28, 1891, and was transferred to the Genesee county circuit, on motion for change of venue. On December 10, 1891, the Security Bank, by its attorneys, moved the district court for the county of Hennepin, Minn., to amend the judgment taken against the Price Condit Fence Company on July 6, 1891, and the amended and corrected judgment was made on the 15th of December, 1891. The Price Condit Fence Company became insolvent, and on November 4, 1890, made an assignment for the benefit of creditors to Emmett P. Browning, assignee. The present case was tried in the Genesee circuit, before the court and jury. The court admitted the evidence that the defendant Frackelton was a joint maker and surety, and, at the close of the evidence, ordered the same to be stricken out; and then the case was continued for the taking of further evidence, and, by the consent of the parties, the jury was discharged from the further consideration of the case, and the court rendered a judgment in the case on December 23, 1895. The defendant in the case pleaded the general issue, and gave notice by special plea of the fact that he was an irregular indorser before delivery, and received none of the consideration, becoming thereby joint maker and surety, which fact was known to the actual plaintiff, and that, after the maturity of the notes, the same were extended, without the knowledge or consent of the defendant Frackelton, by the payment of the interest in advance by the maker, the Price Condit Fence Company, to the Security Bank, for a specified time; and of the previous judgment upon the same identical notes, which would be a bar to the present action.

The legal questions are:

(1) Was it not competent for defendant Frackelton to show by parol testimony that he was a surety on the notes, as well as a joint máker, and that that fact was known to plaintiff ?
(2) Was not the evidence of the acceptance of interest in advance on these notes, after their maturity, by the payee, the Security Bank, from the maker, the Price Condit Fence Company, and the several notices sent by the Security Bank to the Price Condit Fence Company thereafter, saying these notes would be due at the various times to which such interest had been paid in advance, and the verified answer of the Price Condit Fence Company in the suit brought in Minnesota by the Security Bank, alleging the extension of these notes, and the reply of the Security Bank, admitting the receipt of the money, admissible as tending to show an extension of the notes, and without the knowledge or consent of defendant Frackelton, releasing him as surety thereon, and should not this evidence have been submitted to the jury for their determination as to whether or not the notes were extended and defendant Frackelton released, the same being a question of fact ?
(3) Did not the judgment taken by the Security Bank of Minnesota against the Price Condit Fence Company, as maker of the notes, in the suit brought in the district court of Hennepin county, Minn., against the Price Condit Fence Company jointly with defendant Frackelton and others, on these same notes, amount to an election on the part of the Security Bank, and a release of defendant Frackelton, and thereby become a bar to this action ?

The first and the third of these questions must be determined' in accordance with the law of Minnesota, as the notes in question are Minnesota contracts.

1. It has been frequently held by the supreme court of that State that, in an action on a note by the payee against the maker or indorser, it is not competent to show by parol that there was at the time a parol agreement that such maker or indorser should not be held on the undertaking as maker or indorser. First Nat. Bank v. National Marine Bank, 20 Minn. 63; Kern* v. Von Phul, 7 Minn. 426 (82 Am. Dec. 105). This holding accords with the decisions of this court (see Kulenkamp v. Groff, 71 Mich. 675 [1 L. R. A. 594, 15 Am. St. Rep. 283]; Phelps v. Abbott, 114 Mich. 88, and cases cited), and is likewise in harmony with the great weight of authority, as we conceive. These holdings rest upon the rule that it is incompetent to vary by parol the terms of a written instrument. This rule is not, however, generally held to preclude evidence that the makers of such an instrument are, as between themselves, the one principal and the other surety, and that the payee is acquainted with that fact, not for the purpose of showing that the maker is not liable as he contracted to be, but to show that it would be inequitable to permit the payee to vary the terms of the contract or imperil the rights of the surety by an extension. This doctrine is accepted by the courts with equal unanimity. 1 Am. & Eng. Enc. Law (2d-Ed.), 343; Smith v. Shelden, 35 Mich. 42 (24 Am. Rep. 529); Stevens v. Oaks, 58 Mich. 343. A careful examination of the cases cited by the plaintiff has not resulted in our finding a case decided by the Supreme Court of Minnesota in conflict with the current of authority upon this subject, while we think Strong v. Baker, 25 Minn. 442, supports it. It must be held that it was competent for the defendant to show that he was, as between the Price Condit Fence Company and himself, a surety, and that the bank had notice of this fact.

2. Was there testimony tending to show that the time of payment was extended on these notes ? We think there was. It appears by the testimony that a sum equal to the interest on each of these notes for 90 days was paid in advance, and that notice that the notes would fall due at a date three months later than the original date of their maturity was sent out by the bank. These facts certainly had some tendency to support defendant’s claim; indeed, if unexplained, would have established the fact of an extension. True, there was testimony that the payments were not received to apply on interest, but this evidence did not preclude the defendant from having the jury pass upon the credibility, and determine whether the admissions and acts of the bank officials at the time are in accord with the actual facts.

3. Was the judgment taken against the Price Condit Pence Company a bar ? The original judgment was taken in the district court of Hennepin county, Minn., against the Price Condit Fence Company alone, in an action brought by the bank against all the makers of the notes. This judgment was, as before stated, afterwards amended so as to read in form against all the defendants. The judgment in form as amended was not an extinguishment of the demand sued upon. Bonesteel v. Todd, 9 Mich. 371 (80 Am. Dec. 90); Holcomb v. Tift, 54 Mich. 647. We think the amendment of the judgment was within the authority of the court; but, if the original judgment be treated as in force, it amounted to an ele'ction to proceed against the Price Condit Fence Company alone, and worked a discontinuance as against the defendants not served. In Schultz v. Howard, 63 Minn. 196, it was held that the parties to such a note as those in suit in this case were joint and several makers, and that a judgment against one is no bar to an action against the other. We hold that, applying the law of that State to the case, there was no merger.

For the errors pointed out, the judgment will be reversed, and a new trial ordered.

The other Justices concurred.


author: Hooker, J.

text:
    LEWICK v. GLAZIER.
    1. Municipal Corporations — Special Meetings op Council— Presumption op Regularity — Evidence.
    Technical nicety is not required in the proofs adduced to show that a special meeting of a village council was properly called, and that notice thereof was properly served upon the members, but, where they satisfy any express requirements of the statute upon the subject, they will be aided by a presumption in favor of the regularity of the proceedings.
    2. Same — Proof op Notice.
    The general act for the incorporation of villages (Act No. 3, Pub. Acts 1895) provides ( chap. 5, § 4) that the president or any three members of the council may appoint special meetings thereof, “notice of which, in writing, shall be given to each trustee, or be left at his place of residence, at least six hours before the meeting.” In a suit involving the validity of a special meeting, the president testified that he called the same, and the marshal testified that he served notices thereof upon all of the trustees that he could find, and left such notices at the respective residences of the others, six hours before the time appointed for the meeting; and that, after the meeting, he made a return of service, and certified it, and gave it to the clerk. There was pasted upon the records of the council the marshal’s certificate showing service of written notice in due time, but it did not appear when or by whom this certificate was attached. Only one member of the council was absent from the meeting, and he was not produced to deny the service. Held, that the proof was sufficient to show a valid meeting.
    3. Same — Waterworks—Territory Benefited.
    The fact that a waterworks system contracted for by a village does not furnish water to the whole territory incorporated will not render the contract void.
    4. Same — Validity of Contract — Monopoly.
    A contract entered into by village officers for the construction of waterworks, pursuant to authority conferred upon them by section 11 of chapter 11 of the general charter, accompanied, by a grant of rights in the streets necessary to the carrying out of the contract, is valid, although it creates a monopoly, to the extent of the powers delegated by the charter.
    5. Same — Formalities of Action Taken.
    Since, under section 5 of chapter 5 of the general charter of villages, appropriations of money may be either by ordinance or resolution, a contract for waterworks in the form of an ordinance is valid, though lacking formalities requisite to ordinances, if action by resolution taken in the same manner would have been sustained.
    6. Same — Disqualification of Trustee — Relationship to Contractor.
    The fact that a proposed contractor for the construction of a waterworks system in a village is a son of one of the members of the council does not disqualify such member from voting upon the proposition.
    Appeal from Washtenaw; Kinne, J.
    Submitted February 5, 1898.
    Decided March 29, 1898.
    Bill by William G. Lewick and others against Frank P. Glazier and the village of Chelsea to restrain the carrying out of a contract for waterworks. From a decree for complainants, defendant Glazier appeals.
    Reversed.

      D. B. Taylor (B. M. Thompson, of counsel), for complainants.

      A. J. Sawyer (Edwin F. Oonely and G. W. Turn-hull, of counsel), for defendant Glazier.

      A. F. & F. M. Freeman, for defendant village.
   Hooker, J.

In the summer of 1896 the defendant Frank P. Glazier began the construction of works, and the laying of street mains, with a view to supplying the village of Chelsea with water for fire and other purposes, in reliance upon a contract which had previously been made between the village, through its common council, and himself. Some resident taxpayers filed the bill in this cause to prevent the performance of this contract, upon the ground that it was void; making Glazier and the village parties defendant. Before the hearing, the works were completed and put in operation. The defendant Glazier has appealed from a decree granting the prayer of the bill.

The contract is alleged to be void for several reasons, viz.:

1. It was made at a special meeting, which is not shown to have been properly called, and there is no proof that notice of the meeting was properly given.
2. It has not the requisite number of votes, without counting those of several trustees who were disqualified from voting upon the Subject, by reason of personal interest in the contract, and relationship to defendant Glazier.
3. The ordinance was defective in that it was not entitled as the charter requires, and was given immediate effect before publication, and no certificate of publication was ever filed.
4. The contract attempted to create a monopoly.
5. It was so unreasonable as to be beyond .the power of the council.

The council consisted of six members, — the president and five trustees. The charter provided that “the president or any three members of the council may appoint special meetings thereof, notice of which, in writing, shall be given to each trustee, or be left at his place of residence, at least six hours before the meeting.” Act No. 3, Pub. Acts 1895, chap. 5, § 4. At the meeting when this contract was made, one member was absent. The president, Schenk, testified that he called the meeting, while the marshal testified that he served notices of the meeting upon all of the trustees that he could find, and left such notices at the respective places of residence of the others, six hours before the time appointed for the meeting; that he told the president at the meeting that he had served them; and that, after the meeting, he made a return of the service, and certified it, and gave it to the clerk. He was corroborated as to some of these statements by one or more witnesses, and there was pasted upon the record of the council the following:

“ George P. Glazier, A. H. Mensing, John J. Raftrey, I. Vogel.
“I, Rush Green, village marshal, do hereby certify that on this date (August 24, 1896) I served written notices on trustees George P. Glazier, J. P. Foster, J. J. Raftrey, F. Wedemeyer, and I. Vogel, relative to a special meeting of the village council to be held at 8:30 o’clock p. m. on date above mentioned, as per order of William P. Schenk, president. I further certify that all the notices referred to were served not later than 2 o’clock p. in., above date.
“Rush Green, Village Marshal.”

It does not appear when this was attached, or by whom.

It is contended that, inasmuch as all of the trustees were not present at the meeting, the proof is insufficient to show the regularity of the meeting, because neither the call nor the proof of service of notice appears upon the record, and for the further reason that there is no proof of the contents of the notice served. It is also said that it does not appear that the call or notice stated the object of the meeting, or was in writing.

The provision in relation to the appointment of special meetings is general. It is not, in .terms, required to he in writing, or to state the object of the meeting; nor is anything said about its being filed or made a matter of record. The notice must be in writing, and must be served on each trustee, or left at his place of residence, at least six hours before the meeting. “Special meetings, properly called according to the rules laid down in the charter, are legal, and the proceedings valid, if all the members entitled to be present are properly notified.” Tied. Mun. Corp. § 9?; 1 Dill. Mun. Corp. §§ 263, 268. In many of the States it is held that where acts have been done by the directors or trustees of a corporation, private or municipal, the law presumes the meeting to have been properly called, unless by the terms of the statute preservation of evidence thereof is required. The opinion in the case of State v. Williams, 25 Me. 564, quotes Thayer v. Stearns, 1 Pick. 109, as authority for the proposition that ‘ ‘ every presumption should be made in favor of the regularity of such meetings,” and states:

“The experience of all our judicial tribunals must have gone far to teach the necessity of not being hypercritical in reviewing the proceedings of our multiplied municipal corporations. We all know that those necessarily, or at least ordinarily, employed to transact the affairs of those corporations, cannot be expected to be possessed of much, if of any, legal acumen. Certainty to a common intent, and such as would suffice for all practical purposes, would seem to be all that could be expected in such cases, or be reasonably required. But, however this may be, the legislature of this State have deemed it expedient to prescribe particularly what shall be done by those who may be required to warn town meetings, and what their returns of their doings shall contain. Whenever, therefore, it shall hereafter be found that there was any deficiency in any such particulars, there would seem to be no alternative but to consider the meetings held under any such defective return to be void, whatever may be the consequences resulting from such a determination; and it may well be doubted if many of the town meetings, since the enactment of those regulations, could be held to be valid.”

This doctrine was applied in Granger v. Original Empire, etc., Mining Co., 59 Cal. 678, where a statutory notice was required. So, in Iowa, a presumption that a bill received the requisite vote of tw.o-thirds of the council was indulged, upon the presumption that attends official action. State v. Vail, 53 Iowa, 550. In State v. Smith, 22 Minn. 218, it was held that:

“ It appearing that a meeting of the council was held, at which business was transacted which it only had a right to do at a legal meeting, it will be presumed, if necessary, and nothing to the contrary being shown, that all its members were present and acted.”

So, in Chosen Freeholders of Hudson Co. v. State, 24 N. J. Law, 718, the court of errors held that:

‘ ‘ If any proceeding of a municipal corporation be hdd at an adjourned meeting, it will be presumed, until the contrary appear, that the meeting was rightly adjourned. It is not necessary that the facts showing the proper con-veiling of such corporation should appear in every resolution of the body, or upon the face of the proceedings, when any part is removed by certiorari.”

Again, in Chouteau Ins. Co. v. Holmes’ Adm’r, 68 Mo. 601 (80 Am. Rep. 807), it was held:

“When it is shown that a special meeting of the board of directors of a corporation was held, and that a quorum attended, it will be presumed, in the absence of evidence to the contrary, that due notice of the meeting was given to all the directors, and that all the steps were taken which were necessary to constitute it a valid meeting.”

See, also, Rutherford v. Hamilton, 97 Mo. 543; Tierney v. Brown, 65 Miss. 563 (7 Am. St. Rep. 679); Corburn v. Crittenden, 62 Miss. 125; Brigins v. Chandler, 60 Miss. 862; Dubuc v. Voss, 19 La. Ann. 210 (92 Am. Lee. 526); Com. v. Slifer, 25 Pa. St. 23 (64 Am. Dec. 680); Culbertson v. Milhollin, 22 Ind. 362 (85 Am. Dec. 428).

As to the sufficiency of the proof of notice, if we were to consider that question, the same presumption attaches. See Briggs v. Murdock, 13 Pick. 305; Houghton v. Davenport, 23 Pick. 235; and Rand v. Wilder, 11 Cush. 294. In the latter case a return by the officer that he had “ posted the within warrant according to law” was held sufficient. See, also, Barr v. Mayor, etc., of New Brunswick, 58 N. J. Law, 255; City of Auburn v. Union Water Power Co., 90 Me. 71 (38 L. R. A. 188).

In Michigan, however, a contrary rule has been applied to special meetings of township boards, in cases cited by counsel. The first of these is the case of Township Board of Beaver Creek v. Hastings, 52 Mich. 528, where it was sought to compel a clerk to record the proceedings of a meeting when it did not appear that the meeting was “duly called and notified.” Maniifestly, this case did not turn on the effect of action by such a meeting, or the perpetuation of proof of its validity, but, in a direct proceeding, raised the question of its validity. Harding v. Bader, 75 Mich. 320, indicates the necessity of proof of the regularity of the meeting; and this is followed by the case of Auditor General v. McArthur, 87 Mich. 464. None of these cases go so far as to lay down the broad proposition that, in the absence of a Statutory requirement, the journal or record of proceedings must contain evidence of service of a notice of the meeting. In Boyce v. Auditor General, 90 Mich. 325; it is said that it is common to file it when the statute does not prescribe a method of proof, and that it is not usual to record it; that, when so filed in a public office, such proof constitutes a part of the records of that office.

In this case a paper bearing the genuine signature of the marshal is attached to the record. It is objected to as insufficient, because — First, it is not filed; and, second, it is not sufficiently specific as to the character of the service. We think we should not hold this proof defective merely because the village clerk pasted the return upon the page of the journal of the proceedings, instead of keeping it as a file. It is none the less authentic; it is more accessible and certain to be found; and, furthermore, if he had destroyed or lost it, it might have been proved by oral testimony. It is corroborated by the testimony of the marshal, and by the fact that, with one exception, the entire council knew of and attended the meeting, and the absent member is not produced to deny such service. Upon the whole record, we are convinced that notice was properly served, even if the proof is lacking in technical nicety. In cases cited we have seen that too great strictness may be required in such proof, and that presumptions of regularity may afford aid to substantial proof. We are of the opinion that the meeting was a lawful one.

Next we may say that the contract was one which the charter gave the village council the power to make. Monroe Water Co. v. Heath, 115 Mich. 277; Act No. 3, Pub. Acts 1895, chap. 11, § 11. And, under the case of Mitchell v. City of Negaunee, 113 Mich. 359 (38 L. R. A. 157), we cannot hold it void because of the extent of territory incorporated which was beyond the protection of the waterworks. Nor should we set it aside upon the ground that it creates a monopoly; for if this is true, and the agreement for the monopoly void, there is yet sufficient consideration to support the contract of the defendant Glazier. The promise to pay for water is valid, and the grant is valid, to the extent of the power delegated to the council. For a discussion of this subject, see 1 Pars. Cont. (8th Ed.)* 457, and note 1, and cases cited; Stewart v. Railroad Co., 38 N. J. Law, 505; Presbury v. Fisher, 18 Mo. 50; Erie R. Co. v. Union, etc., Express Co., 35 N. J. Law, 240; Ohio v. Board of Education, 35 Ohio St. 519. See, also, Clark, Cont. 474, and People v. Railway Co., 92 Mich. 522 (16 L. R. A. 752).

An ordinance was unnecessary in the making of a contract of this kind. It might be done by resolution. And we therefore find it unnecessary to consider the manner in which it was entitled or published. Act Noi 3, Pub. Acts 1895, chap. 5, § 5.

The remaining question relates to the interest of the-trustees in the contract. It is urged by the complainants that, previous to the action of the council, it was arranged by Glazier and the. electric light company that, if he obtained the projected contract, they should furnish power for pumping the water, for a consideration, and that three of the members of the council were members of the electric light company at the time the contract was made, and that another member was Glazier’s father. If any two of these four persons were disqualified, the action of the council was void. It is admitted that Wedemeyer was a member of the electric company. The other two explicitly state that they were not during the year 1896, when these transactions occurred, and there is no testimony that they were, unless we are to so conclude from the failure to produce the books of the electric company, which the witness Davis, president of the company, professes to have lost. What the books would have shown is a matter of conjecture, and we do not feel justified in concluding that either of these men was snch member, in the face of their sworn testimony to the contrary. Trustee Glazier was not disqualified by reason of his relationship to the defendant.

The decree of the circuit court-in chancery is reversed, with costs to the defendant Glazier against the complainants. The defendant village will not recover costs, as it is here in the attitude of complainant.

The other Justices concurred.


text:
    RANDALL v. TOWNSHIP OF SOUTHFIELD.
    Bridges — Notice of Defect — Evidence.
    In an action against a township for damages occasioned by the collapse of a bridge, evidence that there was a decayed spot in the stringer, the breaking of which caused the accident, which looked darker than the other portions of the stringer, at least when it was wet, does not show conclusively that the township had constructive notice that the structure was in need of repair, but its force as bearing upon that question is for the jury.
    Error to Oakland; Smith, J.
    Submitted February 4, 1898.
    Decided March 29, 1898.
    Case by George E. Randall against the township of Southfield for damages caused by a defective bridge. From a judgment for plaintiff, defendant brings error.
    Reversed.

      Samuel W. Smith and A. & S. H. Perry, for appellant.

      Sayles & Sayles and James H. Lynch, for appellee.
   Montgomery, J.

The plaintiff brought this action to recover damages for injuries to a traction engine which fell through a bridge over the River Rouge within the limits of defendant township. The case was tried before a jury. Plaintiff recovered a verdict of $745, upon which judgment was entered, and defendant brings error.

The accident occurred on September 27, 1890. The bridge was a truss bridge, and gave way because of the breaking of one or more of the outside stringers of the bridge. The questions involved were whether the stringers in question were in fact defective (and of this, as to one of them, there was abundant proof); whether the defect was of such an obvious character that the officers of the defendant charged with the care of its bridges should, in the exercise of due care, have known of the defect, and repaired it (and on this point the evidence was conflicting); and, lastly, whether the plaintiff was free from contributory negligence (which last quéstion was left to the jury under proper instructions).

The principal questions discussed in this court relate to the instructions upon the subject of constructive notice to the township of the defect or defects in the stringers. The plaintiff called two witnesses, who testified as to the condition of the stringers previous to the injury. Will Cook testified on direct examination as follows:

“We started to water our horses there, I think, in the latter part of May, but I couldn’t state when I first saw it. I first noticed the defect when riding a horse down there to water. There was a little decayed spot, six or seven feet, I should judge, from the west end of the bridge, on the south. It extended a foot and a half along the stringer, I should judge, and two or three inches up and down along the face. There was an old check running each way from the rotten spot. It ran east from the spot perhaps two feet. It might not have been so far, I couldn’t say. I should judge it ran about the same distance west of the spot. It could not have been so much. I never made any closer examination than from the back of a horse at times when I was down there.”

On cross-examination the witness testified that the defect did not particularly attract his attention, and that he did not regard it as anything serious; that “the decayed spot was a little -darker than the other; certainly it is when it is wet; of course, it would dry up, and look like the rest of the stick;” and further, by question and answer, as follows:

“Q. Then, when it wasn’t wet, it looked more like the rest of the stick, — is that right ? '
“A. It 'looked a little darker, but, of course,-it looked more like the rest of the stick.
“Q. When it wasn’t wet?
“2. When it wasn’t wet; and when it was wet it looked dark.”

The witness further stated that the rotten spot was at about the center of the stringer, on the flat side.

Edward Prince testified, on direct examination, that he noticed a rotten spot in the stringer, six, seven, or eight feet from the west end; that it was on the top side of the stringer. On cross-examination the witness locates the decay at a point where an iron rodaran through the stringer, — a point a much greater distance from the west end, — and testified: “I did not see any decayed spot on the stringer myself six or seven feet from the west end.”

The circuit judge, in instructing the jury on the question of notice, used the following language:

“Iff is his [plaintiff’s] theory that the bridge, or south stringer of the bridge, was decayed, and broke; or, as on'e of the witnesses states it, that it had a decayed spot, and that they noticed it some months previous to the 27th day of September.. I refer more especially to the testimony of witnesses Cook and Prince; and, that being true, the township is chargeable with constructive notice. I think I ought to say to you, and it is my duty to say to-you, that if you believe the testimony of witnesses Cook and Prince, more especially the testimony of Prince, that such a decayed spot was existing in that stringer as described, and that the plaintiff did not by his own negligence contribute to the injury, that he is entitled to recover from the township.”

The substance of this instruction was also embodied in a request preferred by the plaintiff and given by the court.

We think these instructions were error. The instructions amounted to holding that, as matter of law, such a decayed spot as described by either of these witnesses was enough, in and of itself, to amount to notice that the sleeper was unsafe. That this question was competent to be considered by the jury cannot be gainsaid, but it was insisted by counsel for the defendant, and we think rightly, that the effect of these defects as notice should be determined by the jury. The cross-examination of Cook leaves it doubtful whether the discoloration was perceptible in dry weather, and the question of the extent of the discoloration, the appearance of the spot, its location, and what it would suggest to those having charge of the bridges of the town, were questions for the jury; the test being whether the appearances were such as to suggest to a person of ordinary skill and judgment the fact of unsafety or the necessity of further investigation, and whether such defective appearances existed for such a length of time as that their inspection at reasonable intervals would have disclosed their appearance to the inspectors. Woodbury v. City of Owosso, 64 Mich. 239; Blank v. Township of Livonia. 95 Mich. 229; Township of Medina v. Perkins, 48 Mich. 67; Alberts v. Village of Vernon, 96 Mich. 549; Snyder v. City of Albion, 113 Mich. 275; Moore v. Township of Kenockee, 75 Mich. 332 (4 L. R. A. 555).

We think none of the other questions require discussion. The judgment is reversed, and a new trial ordered.

The other Justices concurred.


author: Long, J.

text:
    PEOPLE, ex rel. WARD, v. GREEN.
    1. Municipal Corporations — Common Council — Grant op Rights in Streets.
    Under 1 How. Stat. § 3621, authorizing a majority of a city council, in writing signed by them, to grant a right to construct a plank road in a street, such a right is obtained by a conveyance executed by the mayor and two of the four aldermen of a city whose charter makes the mayor and aldermen the common council.
    2. Corporations — Articles op Association — Amendment—Extension op Corporate Existence.
    An amendment of the articles of association of a corporation, extending the period of its existence at a time when there was no statute allowing such an amendment, which provision is continued in a subsequent amendment of the articles, made after the passage of an act authorizing such an amendment, operates as a valid extension of the corporate existence, even though the preamble to the amended articles does not refer to the proposed extension.
    3. Same — Plank-Road Companies.
    Under 1 How. Stat. § 4866, providing that any corporation may amend its articles of association in manner consistent with the provisions of the act under which it was organized, a plank-road company incorporated under 1 How. Stat. § 3597 et seq., may, by-amendment, continue its corporate existence beyond the time fixed by the original articles, provided the entire term does not exceed that for which it might have incorporated in the first instance.
    Error to Oakland; Smith, J.
    Submitted February 4, 1898.
    Decided March 29, 1898.

      Quo warranto proceedings by the people, on the relation of Willis O. Ward, against Hartwell Green and others, to inquire into the corporate existence of the Pontiac & Orchard Lake Gravel-Road Company. From a judgment for respondents, relator brings error.
    Affirmed.

      Fred A. Maynard, Attorney General (James H. Lynch and Chamberlain & Guise, of counsel), for appellant.

      Aug. C. Baldwin and A. & 8. H. Perry, for appellees.
   Long, J.

This proceeding is by information in the nature of a quo warranto, filed under section 8635, 2 How. Stat., for the purpose of testing the validity of the existence of a corporation known as the Pontiac & Orchard Lake Gravel-Road Company, which claims the right to operate a toll road from Williams street, in the city of Pontiac, over Orchard Lake avenue, in said city, and highways adjoining thereto in the townships of Pontiac, West Bloomfield, and Bloomfield, —altogether a distance of about 10 miles.

It appears that on September 9, 1865, a corporation adopted articles of association to construct a gravel road “from the corporate limits of the city of Pontiac on the Orchard Lake road; thence, along the line of said road, to a point about 10 rods west of the outlet of Orchard Lake, a distance of four miles.” These articles were filed with the secretary of state on October 13, 1865. These articles did not provide the period of corporate existence, and it was evidently thought that they were defective; for, on March 23, 1866, other articles of association were filed in the office of the secretary of state, bearing date of March 2, 1866. They were filed under Act No. 155, Laws 1851 (1 How. Stat. § 3597 et seq.) The period of existence was fixed at the term of 30 years, with capital stock at $5,000. The corporation was organized to construct a gravel road “from the intersection of the Orchard Lake road with Williams street; thence, upon the line of said Orchard Lake road, to a point where the road, passing around the north shore of Orchard Labe, first strikes said Orchard Lake, a distance of four and one-half miles,” —thus including other territory than that embraced in the former articles. It is recited in the preamble that “permission has been given in writing by the supervisors, township clerks, and highway commissioners of the respec: tive townships through which said gravel road is to pass, and also by the common council of the city of Pontiac, which permits have been duly filed in accordance with the law in such cases made and provided.” On July 14, 1866, this corporation adopted amended articles. In the preamble thereto it is recited that “it was deemed necessary, in order to complete the road and construct suitable bridges and culverts, to increase the capital stock of the company, and also to change the terminus of the road.” These articles provided a capital stock of $10,000, and extended the line of the road to five miles. These amended articles were filed with the secretary of state July 17, 1866. They also fixed the period of the corporate existence at 50 years.

In November, 1869, another corporation, known as the Lake Shore Gravel-Road Company, was organized to construct a gravel road from the western terminus of the Pontiac & Orchard Lake Gravel-Road Company’s road southerly about two miles. January 11, 1875, at a meeting of its stockholders, the Pontiac & Orchard Lake Gravel-Road Company adopted- amended articles of association. These were filed with the secretary of state January 25, 1875. The preamble to these amended articles recites that it “was resolved to amend the charter of said company so as to embrace the territory included in the franchises of the Lake Shore Gravel-Road Company, and to increase the capital stock, amending articles two and five, respectively, in the articles of association of the Pontiac & Orchard Lake Gravel-Road Company so that said articles shall read as follows. ” Article 2 provided a capital stock of $20,000, instead of $10,000, as provided under the articles of July, 1866. Article 5 provided an extension -of the line, so as to include the other company’s line and other lines,, embracing in all about 10 miles of road. Article 8 provides that “the period for which this organization shall be a body corporate shall be 50 years from the date of the original organization of the company, September 9, 1865, — which amended articles of association were unanimously adopted at a meeting of all the stockholders of said corporation at the meeting aforesaid.” The Pontiac & Orchard Lake Gravel-Road Company thereafter assumed control over and operated the routes previous to that time operated by itself and the other company.

1. It is contended by relator that this corporation never obtained any legal grant from the city of Pontiac to operate over any of the streets of said city. At the time the right was granted the corporation to occupy the streets of the city of Pontiac, the charter made the mayor and aider-men the common council. Act No. 192, Laws 1861, § 36. There were two wards in the city, and consequently four aldermen, who, with the mayor, made five members of the council. Two aldermen and the mayor signed the conveyance of the right of way over the streets of the city. Section 3621, 1 How. Stat., relating to such corporations, in force at the time when this conveyance was made, provides :

“Whenever such company may wish to use any part of a street in any city * * * for the construction of their plank road, * * * such company shall apply to the common council * * * for the right tó construct their plank road thereon; and it shall be the duty of such common council * * * to examine, at the expense of such company, so much of any such street as may be wanted, * * * and if, in the opinion of a majority of such common council, * * * the public interest would not be prejudiced by granting the application of such company, said common council * * * may, in writing.signed by them, grant to such company a right to enter upon, take, and use such * * * street, * * * and, upon filing such grant in writing in the office of the register of deeds, * * * the said company may forthwith enter upon, take, and use such street,” etc.

We think, under this statute and from the conveyance taken, it cannot be said that the company did not obtain a legal grant from the city of Pontiac.

2. It is contended that the period of existence of the corporation expired not later than March 23, 1896. It is evident that the learned counsel for relator fix this period for the expiration of the charter as the limit of the 30 years from the time the articles of .association of March, 1866, were filed with the secretary of state. The question for consideration is, therefore, whether the articles of association have been legally and properly amended so that the period of the life of the corporation is extended to 50 years from its organization. The only power to amend the articles of association was in reference to the increase of the amount of the capital stock, until Act No. 86, Laws 1871, was passed. That act amended section 7, chap. 55, Rev. Stat. 1846, and, among other things, provided:

“Such corporation may at any time amend its articles of association by filing amended articles of association in the office of the secretary of state, which said amended articles of association shall be made in all respects consistent with the provisions of the act or acts under which such corporation may be organized, and shall be executed by said corporation under its corporate seal, and by stockholders of said corporation owning at least a majority of all the capital stock of said corporation, under their seals, and duly acknowledged.” 1 How. Stat. § 4866.

It is not contended but that this amendment, made in 1875, complied in all respects with the requirements of this statute; but the claim is that, as in July, 1866, when the amended articles were filed providing for an existence of the corporation for 50 years, there was no statute allowing such an amendment, therefore no amendment has ever been made to that section of the articles continuing the corporate existence beyond the time fixed in the articles in March, 1866; that the action taken, as recited' in the amended articles filed January 25, 1875, does not amount to an amendment of article 8, which is a mere repetition of the article adopted in July, 1866; and that the preamble rebuts any presumption that it was intended by the stockholders, to amend that article continuing the life of the corporation 50 years from date of organization. This preamble has been given.

We cannot agree with this contention. While it is true that the amendment of July 17, 1866, had no legal effect, because there was then no power to so amend, yet the articles contained the provision for a continued existence of 50 years when the amendment of 1875 was adopted, and that provision was continued in the articles when the amendment was'made in 1875. There is nothing to show that the stockholders or directors had any doubt whatever of the efficiency of that amendment, and it is significant that there was incorporated in the articles the very provision which continued it for 50 years. The articles were so adopted and filed with the unanimous consent of all the stockholders.

Counsel cite People v. Plainfield Ave. Gravel-Road Co., 105 Mich. 9, and contend that that case sustains their claim that the amendatory act of 1871 did not confer the right to extend the term of existence of that corporation. In that case, however, the company sought to abandon a part of its road, and it was held that it could not abandon that part. It appeared that that part had been included in its line by an amendment of its articles, and the company, in order to get rid of that portion, and the expenses incident to the building of a bridge thereon, sought to again amend its articles and exclude that portion. The amended articles were filed, and thus that part abandoned, so far as the company could abandon it. After citing the statute (1 How. Stat. § 4866) it was said:

“Under this act these corporations may amend their articles in all those matters which do not affect the public, and with which, therefore, the public is not concerned, such as increase or decrease of their capital stock. As already shown, they cannot appropriate to their use or benefit any portion of an existing public highway without the assent of the proper public authorities.”

Having amended by taking in this part of the road, it was said: “ They cannot receive the benefits without accepting and bearing the burdens.” It was therefore held that the statute did not confer the right to abandon this portion.

Clearly the statute (section 4866)' gives the right in most explicit terms to amend; the amended articles, however, to be made in all respects consistent with the provisions of the act or acts under which the corporation was organized. The act under which the company here was organized permitted a corporate existence of 50 years, and the amendment made was within the terms of that act.

It may be further added, in reference to the claim that the preamble does not show any attempt to amend the article extending the time of corporate existence, that the court below found that ‘ ‘ there was no intention on the part of the Pontiac & Orchard Lake Gravel-Road Company, when it attempted to amend its articles of association on January 11, 1875, to change article.8 thereof. The company treated the amended articles of July, 1866, as properly made and filed, and in 1875 copied article 8 therefrom.”

We think the court below very properly entered judgment in favor of the respondents. That judgment must be affirmed.

The other Justices concurred.


author: Moore, J.

text:
    CHILDS v. NORDELLA.
    1. Trial — Findings of Fact — Appeal.
    Special findings of fact in a case tried before the court without a jury have the force of a verdict, and will not be disturbed if there is any testimony to support them.
    3. Same — Exceptions.
    Rulings to which no exceptions were taken will not be reviewed on appeal

      3. Same — Garnishment—Evidence.
    Where, in garnishment proceedings, the only material issue was whether the principal defendants were indebted to one to whom before garnishment they had assigned their claim against the garnishee, it was not error to exclude testimony bearing upon their insolvency.
    Error to Kent; Grove, J.
    Submitted February 4, 1898.
    Decided March 29, 1898.
    Garnishment proceedings by William H. H. and Eversley Childs against Joseph G. Nordella and Rollin H. Owen, as garnishees of John T. and Theodore W. Elliott. Caroline S. Elliott claimed the fund as assignee, and had judgment. Plaintiffs bring error.
    Affirmed.

      H. JB. Fallass and G. A. Wolf, for appellants.

      Taggart, Knappen & Denison, for appellee Caroline S. Elliott.
   Moore, J.

The plaintiffs sued John T. Elliott & Son, the principal defendants, and garnished Nordella & Owen, who disclosed that they were indebted to the principal defendants, but had been notified that the amount of thfeir indebtedness had been assigned to Caroline S. Elliott. The case was tried in justice’s court, and from there appealed to the circuit court, where it was tried by the judge without a jury. The judge made a written finding of facts, and found, among other things, that on September 19, 1896, the plaintiffs sued the principal defendants, and had a writ of garnishment issue to the garnishee defendants; that the principal defendants had, the day before, assigned, in writing, their claim against the garnishee defendants, to Caroline S. Elliott, and delivered the assignment to her.

The only question involved is, Was that assignment made for an existing indebtedness to Mrs. Elliott? It was the claim of Mrs. Elliott that the principal debtors had collected rents belonging to her for a series of years, agreeing to apply them in paying taxes on her property, and interest upon mortgages that were upon her two houses, and the surplus to be applied in reducing the principal of the mortgages. It was also her claim that, when Elliott & Son made their contract with the garnishee defendants, it was agreed that the proceeds of that contract should be used to pay the interest on her mortgages, which would come due in September. The amount the garnishee defendants owed to Elliott & Son when they were garnished was $204. The circuit judge found that Elliott & Son had collected rent belonging to Mrs. Elliott, under the agreement stated, and that they owed her to exceed $250 at the time this assignment was made. It has been repeatedly held by this court that the special findings of fact in a case tried before a judge stand the same as a verdict of a jury would stand if the case were tried before a jury, and that, if there was testimony tending to sustain the findings of fact, this court would not set them aside. In this case, both Mr. and Mrs. Elliott swore to the indebtedness. They were cross-examined at great length, and counsel insist that, when their testimony is taken as a whole, it is shown no indebtedness exists, and therefore the findings must fail. It was the judgment of the judge that a different conclusion should be reached from the testimony from that drawn by counsel. There was testimony tending to sustain the conclusion reached by the trial judge, and we cannot disturb his findings of fact.

It is said error was committed in the exclusion of testimony. In most instances counsel yielded to the rulings of the court without taking any exception. In those cases we cannot consider the assignments of error.

It is said the court did not allow, on cross-examination, counsel to pursue the question of the insolvency of the principal debtors, and that this was error. We do not see how it could affect the result in this ease if the inquiry had been pursued. There is no dispute but the assignment in this case was made and delivered the day before the suit was instituted. The only question involved was whether Elliott & Son were in fact indebted to Mrs. Elliott. If it had been shown that Elliott & Son were insolvent, it would not throw any light whatever upon the question as to whether they owed Mrs. Elliott.

Judgment is affirmed.

The other Justices concurred.


text:
    La PONTNEY v. SHEDDEN CARTAGE CO.
    Contributory Negligence — Electric Cars — Collision With Vehicle.
    A motorman who runs an electric car, upon a foggy morning, at a rate of speed which does not permit of its being stopped in time to avoid collision with a vehicle after the same becomes discernible upon the track ahead, is guilty of contributory negligence.
    Error to Wayne; Lillibridge, J.
    Submitted February 5, 1898.
    Decided March 29, 1898.
    Case by Joseph LaPontney against the Shedden Cartage Company, Limited, for personal injuries. From a judgment for plaintiff, defendant brings error.
    Reversed.

      L. O. Stanley (Geer & Williams, of counsel), for appellant.

      Edwin E. Conely and Orla B. Taylor, for appellee.
   Montgomery, J.

The plaintiff brought an action for negligent injury, and recovered a verdict and judgment. Defendant brings error.

The testimony offered at the trial tended to show that the plaintiff was at the time of the injury a motorman on one of the cars of the Citizens’ Street Railway. Defendant company is engaged in the business of trucking. On the 6th of September, 1895, at 4:05 a. m., defendant’s employes were engaged in trucking a “merry-go-round” from one part of the city to another. This “merry-go-round ” was 8 to 12 feet high, about 40 feet across, and covered with canvas. The defendant’s driver, in moving this machine, proceeded along Gratiot avenue, upon-which street is located a track of the street railway. The plaintiff was running a motor car on this street, and at the time stated there occurred a collision between the front portion of the car and the rear of defendant’s truck, in which collision plaintiff was injured. The testimony tended to show that there was some fog that morning, and plaintiff testified that the headlight did not throw a light more than 20 feet ahead of the car. The defendant’s servants did not have a light on the rear of the vehicle to give warning.

We need discuss but a single question in the case, as we are all agreed that the plaintiff was himself guilty of such contributory negligence as precludes recovery. He knew it was entirely proper for drivers of vehicles less easy .to be discovered than that driven by defendant’s agent to be traveling the highway ahead of him, and that he owed a duty to such occupants of the street, as well as to himself, to use care to avoid a collision. Plaintiff testified that he did not ring the gong while running the last 657 feet before the collision, and did not see the vehicle until within 20 feet of it, and that it required 25 feet to stop the car. It was the duty of plaintiff to have the car under such control as to admit of its being stopped after he became able to discern objects on the track, and before a collision with such objects should occur. Winters v. Railway Co., 99 Mo. 517 (6 L. R. A. 536, 17 Am. St. Rep. 591); Mahoney v. Railway Co., 110 Cal. 471; Gilmore v. Railway Co., 153 Pa. St. 31 (34 Am. St. Rep. 682).

The judgment will be reversed, and no new trial ordered.

The other Justices concurred.


text:
    WEBB v. DETROIT BOARD OF HEALTH.
    1. Boards of Health — Quarantine—Compensation.
    A municipal board of health will not be required to allow compensation for losses occasioned by the quarantining and disinfecting of premises infected with smallpox, where the only use made of the premises w.as such as was necessary for the proper care of the patients who were there found suffering from the disease.

    3. Same — Negligent Discharge of Duty — Liability.
    If the officers of a municipal board of health are negligent in the matter of disinfecting property, and thereby cause unnecessary damage, such officers, as individuals, and not the municipality, are liable, if any liability attaches.

      Certiorari to Wayne; Hosmer, J.
    Submitted February 1, 1898.
    Decided March 29, 1898.

      Mandamus by Lucy A. Webb to compel the board of health of the city of Detroit to audit a claim for damages. From an order denying the writ, relator brings certiorari.

    Affirmed.

      John J. Speed, for relator.

      Arthur Webster (C. D. Joslyn, of counsel), for respondent.

      A note on quarantine regulations by health authorities is found with the case of Hurst v. Warner, (Mich.) as reported in 26 L. R. A. 484.

   Long, J.

On July 23, 1897, relator filed a petition in the Wayne circuit court, praying for a writ of mandamus against the respondent to compel it to allow her bill for losses occasioned by smallpox infection. The bill was for amount due her “for loss and for compensation by reason of the infection of tbe premises No. 33 Baltimore avenue west, in the summer of 1894, by smallpox:

Cost of renovation, etc., after disinfection____ $107
Loss of rent________________________________ 80
Furniture, bedding, and other articles destroyed 40
$227 ”

An issue having been made upon the petition and answer, the same came on for hearing before the court and a jury. At the conclusion of the testimony, the court denied the writ, without taking the verdict of the jury upon the questions of fact. The court said:

“It is obvious that where the city take's property as a smallpox hospital, or where the property of another has become infected by the act of the city or any of its agents, the city would be liable to respond for the value of such property. The case at bar, however, presents no such question. Mrs. Brown, the tenant of relator, had a case of smallpox in her house, and subsequently a second case broke out. Whatever infection came to the premises or the property therein came in consequence of these cases of smallpox, and without any fault on the part of the board of health, and not as the result in any way of their action. The property had become infected even before any action was taken on their part. It does not appear from the evidence that any measures they took to disinfect the premises injured the property which relator after-wards destroyed, and for which relator seeks compensation. A suggestion has been made that she is entitlód to receive compensation on account of the moving back, after the removal, of the first patient. But it will be remembered that Mrs. Webb was not in possession of the property, but that she had leased the premises to Mrs. Brown; and, if any right exists against the board of health, it does not belong to relator. For this reason a mandamus must be denied.”

The case comes into this court by writ of certiorari. The testimony is all returned in this record.

We are satisfied that the court below was correct. The smallpox broke out through no fault of the health board. As soon as the first case in this house was reported, the patient was removed by the health board to the hospital, and the house quarantined. It was quarantined nearly two weeks, when the second case broke out. This patient was not removed to the hospital, but the house was continued to be quarantined by the board. During all this time it was rented to Mrs. Brown, who continued to live there, and who, the relator testified, paid the rent until the middle of June, and then, because of the smallpox, was not able to pay more rent. But we think no claim can be made for the rent of the house under the circumstances here shown, as the question is ruled by Farnsworth v. Supervisors of Kalkaska Co., 56 Mich. 640. The house was infected before it was quarantined. The proofs show that the goods, after being disinfected, were destroyed by the relator or under her directions, and not by the respondent. She destroyed them, not because they were injured by disinfection, but because they had been infected with the disease. Safford v. Detroit Board of Health, 110 Mich. 81 (33 L. R. A. 300), has no bearing upon this case. The board did not make a hospital of relator’s house, or make any further use of her goods than was necessary to the proper care of the patients who were there found suffering from the disease. It was the duty of the respondent to quarantine the relator’s house, and, for the protection of the public, to disinfect the property. The municipality is not liable for injury to property resulting from the performance of this duty by its officers. If the officers have done their work negligently, and thereby caused unnecessary damage, such officers, not the municipality, are liable, if any one is. Shipman v. State Live-Stock Sanitary Commission, 115 Mich. 488.

The order of the court below is affirmed.

The other Justices concurred.


text:
    MURRAY v. RUGG.
    1. Evidence — Instructions.
    It is error for the court to exclude testimony tending to show that a trust mortgage purporting to be executed by a corporation was not authorized by the board of directors, and afterwards leave it to the jury to determine whether it was authorized or not.
    2. Estoppel — Mortgages—Defective Execution.
    The fact that the holder of an indorsed note of a corporation had some correspondence and conversation with the indorsers, advising them to take security for their claims, and thereby protect his interests as well as their own, and that, after what purported to be a trust mortgage for the benefit of all the creditors had been given to one of the indorsers, he wrote the latter with reference to his management of the business, will not estop him from attaching the property under a claim that the mortgage was never authorizedjby the directors of the corporation, and that he had never assented thereto, where he acted in entire ignorance of the fact that the indorsers were insolvent, and had covered up their individual property, and of the fact that the mortgage was unauthorized.
    Error to Kalkaska, Aldricb, J.
    Submitted November 6, 1897.
    Decided April 5, 1898.
    Trover by James H. Murray against Eolando F. Eugg. From a judgment for plaintiff, defendant brings error.
    Ee ver sed.

      C. L. Bailey and W. S. Mesick (Fitch R. Williams, of counsel), for appellant.

      Pratt & Davis and Totten & Phelps, for appellee.
   Long, J.

-On April 3, 1893, tbe Michigan Handle Company, a corporation organized under the laws of this State, made a mortgage upon all its real and personal property to the plaintiff, as trustee, in trust to secure all its creditors. The trustee took possession soon after the giving of the mortgage. The Antrim County State Savings Bank was a creditor to the amount of $4,325, and was secured to that amount in the mortgage. On May 18, 1893, that bank sued out a writ of attachment, and the sheriff under that writ took into his possession all the personal property conveyed by this mortgage. It appears that the plaintiff, James H. Murray, and Wilbur W. Peck were indorsers on the notes given by the Michigan Handle Company to the bank, and that John H. Edmiston was the president and general manager of the company. These parties were all made defendants with the Michigan Handle Company in the attachment proceeding. That proceeding went to judgment, and the property was sold under an execution. This suit is in trover to recover from the defendant, the sheriff who seized the property, the value of the property taken on the attachment. On a trial before a jury the plaintiff had verdict and judgment for $7,025. A motion for new trial was made and overruled, and defendant brings error.

It is conceded that every debt secured by this mortgage was bona fide, and most of the creditors secured accepted under it at once. The bank is situated at Mancelona, Antrim county. The plaintiff resides at South Board-man, in the same county. The Michigan Handle Company is also situated at South Boardman.

The plaintiff testified that, some two or three days before the mortgage was given, he talked with Mr. Knickerbocker, president of the bank, about taking security for the indebtedness of the Michigan Handle Company to himself, as he and Mr. Peck were indorsers upon all the paper of the company to the bank, as well as indorsers upon other paper of the company to other parties; that on April 1st, and after this talk, he received a letter from Mr. Knickerbocker, advising the taking of the security. The'letter is as follows:

“ J. H. Murray, Esq.,
“Dear Sir: As per your'request when I left you last night, will say I have given your business very careful thought; and, knowing something of the outside feeling about the financial condition of the Handle Company, my advice would be for you and Mr. Peck to file your claim. The suggestion he made to buy it out is the best one, but still you can’t do that without giving notice, and holding a meeting of the shareholders, and the consent by ballot of two-thirds of them. So you see, if you wait to do that, it will require time, and allow others to undermine you. If you thought best, and wire me, I will come down on the 4 p. m.' train, and bring Mr. Bailey, also the State laws, so you can see for yourself the condition of affairs.
“ If I understand it correctly, which I think I do, by you and Mr. Peck taking that into your own charge now, and cutting up that timber, you can get nearly enough out of what is there, and sell the team and equipments, to save yourselves clear, and then, if you don’t want any more of it, turn it back to him, and let him go on with the business. I think, if this scheme was carefully considered, you would all agree with me, and by so doing save yourself and us; otherwise you will both lose heavily, and you can’t avoid it. I wish you would send me a statement of the indebtedness of the firm, and the amount you have indorsed with him at other places than here, and the amount of judgments he has confessed, and claims upon which suit has been begun. It seems there has been an inclination to keep these things from us, and we feel that we are entjtled to know the facts just as they are, without any hesitancy on the part of any one. I feel that, as you said last night, we are secured by your indorsements. Still, if we know your interests are secure, ours is just that much more secure. I trust you will wake up to a realization of the .condition, and not subject yourself to such robbery any longer. Trusting to hear from you by return mail the full facts, I am,
“Yours truly,
“H. Knickerbocker.”

The plaintiff testified further that this letter referred to the making of a mortgage, and that the property to be taken into the possession of himself and Mr. Peck, and run by them, was the property of the Michigan Handle Company; that Knickerbocker said that they ought to be protected for their own interest, and for the interest of the bank and all others; that they had explained to him the indebtedness to others, as they had indorsed paper to other parties for the Handle Company in the various amounts mentioned in the mortgage; that is: The Traverse City State Bank, $1,810; A. F. Young, $990; Old National Bank of Grand Rapids, $650; John De Yries, $610; H. M. Keys, $390; Darragh Bros., $300; A. A. Bleazby, $200; W. W. Peck, $458.59; Peck & Murray, $647.86; that there was also due to different parties from the Michigan Handle Company some $2,500, indorsed by Mr. Murray. The plaintiff further testified that, after the mortgage was executed, he was at Mancelona, and told Knickerbocker that it was on file, and that all the parties were secured; that it was then talked that himself and Peck should take the property, and that the bank should help run the mill; that afterwards, and on April 15th, he received a letter from Mr. Knickerbocker, as follows:

“ Peck & Murray,
Gentlemen: I have been unable to get our committee together, owing to some being absent, but I will say that those I have seen think that we ought to have 10 per cent, on the whole amount. But, through my urgent request to help you people out, they have decided to make 8 per cent, rates on $2,500, and 10 per cent, on sums above that amount.
“ Trusting this will meet your approval, I am,
“ Very truly yours,
“H. Knickerbocker.
“P. S. Please let me know what your decisions are.”

Plaintiff further testified that this letter was received after he had taken possession of the property as trustee, and had reference to himself and Peck taking hold of the business and running it; that they operated the property about a week, when the attachment was served on May 18, 1893; that in the meantime a meeting of the creditors had been called, at which meeting the Antrim County State Savings Bank was represented by its attorney; that the purpose of taking hold of the business with Mr. Peck was to pay the claims of the creditors.

It appears that, soon after this mortgage was given, Mr. Murray and Mr. Peck also gave chattel mortgages on their individual property to secure their creditors, and at the time of the trial it was admitted that Mr. Murray was insolvent.

On the part of the defendant, it was contended, and testimony was introduced to show the fact, that, a few days before this mortgage was given, Mr. Knickerbocker went to South Boardman, and there had a talk with Mr. Edmiston and Mr. Murray about securing the bank for the indebtedness due it from the Michigan Handle Company ; that at this time Mr. Knickerbocker knew nothing of the indebtedness of the Handle Company, except that to the bank, and $400 or $500 outside of that; that at this time an arrangement was made with the Handle Company, through Mr. Edmiston, that a mortgage should be given to the bank to secure it and the indorsérs of the notes; that, when the arrangement was to be carried out, Mr. Knickerbocker was to be notified, and bring his own attorney down there to draw the papers; that this arrangement was not carried out, but he learned a day or two later that the mortgage to Murray as trustee had been executed; that he never accepted the terms of this mortgage. His explanation of the letter of April 1st is that while he was in South Boardman, a few days before, he had his suspicions aroused; that while there he heard that the company had been sued and had confessed judgment, and he wanted to know what it meant; and that the letter was not written to have any indebtedness included in the mortgage, except that of the bank. Mr. Knickerbocker further testified that, at the time the letter of April 15th was written, he did not know that Murray and Peck had executed mortgages upon their stocks, or that they were insolvent; that, a day or two before that letter was written, Murray and Peck came to him, and wanted to run the plant, and put in,. $200 on it, in improvements, if their indebtedness could be reduced that amount;, that it was in response to that request that the letter was written; that he did not understand by that that he was accepting the terms of the mortgage; and that he told Murray and Peck in that talk that he would not accept the terms of the mortgage. He further testified that: “My idea was that it would be better for Murray and Peck to take charge of it, and go on with the business, if they were better financiers than Edmiston; and I thought they were.” He further testified that under this arrangement he expected to look to the parties for the payment to the bank. He denied that the bank had ever accepted the terms of the mortgage, but affirmed that, when the matter was submitted to it, the bank absolutely refused to recognize the mortgage, and refused to make any claim under it, and that the board of directors of the bank, by a unanimous vote, directed the commencement of the attachment proceedings.

It does not appear that Mr. Knickerbocker, by any affirmative act, accepted the terms of the mortgage. All that can be said of the testimony is that, when he found that the mortgage had been given, he sent the attorney of the bank to look it up, and, on ascertaining the true state of facts, reported them to the bank, and the bank refused to accept the terms of the mortgage, and made no claim under it.

After the plaintiff’s case was closed, the defendant sought to show that the execution of the mortgage was never authorized by a majority of the directors or stockholders of the corporation, and that it was made with the fraudulent purpose of putting the property into the hands of Mr. Murray, who was insolvent at the time. The court refused to receive this testimony. The court charged the jury that, if they found that there was a meeting of the directors of the corporation held for the purpose of authorizing the trust mortgage, yet if the legal directors were not all there, and had not all been notified of such meeting, and reasonable time given in which to let the absent ones reach the meeting, then any action taken at the meeting was invalid ; that, if they found that the mortgage was executed by the president and secretary, their power must be derived from a resolution of the hoard of directors; and that, if these officers were not so authorized, the mortgage was not authorized, and plaintiff must fail, “unless the jury find that the mortgagee accepted the trust in good faith, and the same was treated by the Handle Company as a valid instrument, and the Antrim County State Savings Bank accepted the terms of said mortgage by its authorized agents.” It therefore appears that the court, after ruling out the testimony of the defendant to show that the trust mortgage was not authorized, left the question to the jury to determine whether it was so authorized. The plaintiff’s title to the property was in issue. If the mortgage was never authorized by the board of directors, it conveyed no title to the plaintiff. The court very properly so stated to the jury, but, in ruling out the testimony offered to show that it was not authorized, the court was in error.

The court was also in error in submitting to the jury the question of the acceptance of the terms of the mortgage by the bank. It appears conclusively that whatever was done by Mr. Knickerbocker or the bank in reference to that mortgage was in entire ignorance of the insolvency of Murray and Peck, and in ignorance of the fact that the mortgage was never authorized by the board of directors. With those facts ascertained, the hank would not be estopped from making claim under its attachment. The first letter from Mr. Knickerbocker to plaintiff was written before the mortgage was made. When the letter of April 15th was written, Mr. Knickerbocker knew nothing of the insolvency of Murray, though it appears that, 11 days prior to that, Murray and Peck both had conveyed all their property for the benefit of their individual creditors, and Murray had assigned his interest in this very trust mortgage. Neither did Knickerbocker know at this time that the mortgage was not authorized by the board of directors. There can be no estoppel unless a party is misled to his prejudice by the one against whom it is set up, and does material acts relying upon conduct well calculated to mislead him. Palmer v. Williams, 24 Mich. 328; De Mill v. Moffat, 49 Mich. 125. We find nothing in this record which should estop the bank from showing that the mortgage was not authorized.

The judgment below must be reversed, and a new trial ordered.

The other Justices concurred.