text:
    FIELD v. SAGINAW CIRCUIT JUDGE.
    1. Mortgages — Foreclosure—Petition for Deficiency Execution — Nature of Proceeding — Notice.
    The proceedings on a mortgagee’s petition for á deficiency execution, authorized by 1 Comp. Laws 1897, § 517, are merely supplementary to the principal suit; therefore, the court having jurisdiction of the parties in the foreclosure suit may prescribe the kind of notice, and method of service, to be employed by petitioner in such x>roceedings.
    2. Same — Nonresident Defendant — Sufficiency of Service.
    A nonresident defendant who was duly served in the principal suit, and who, after a deficiency was reported, was served personally, though outside the State; with a copy of a petition for a deficiency execution, and was informed as to the time set for the hearing, cannot complain of such service as invalid merely because no order for a substituted service was first procured.

      Mandamus by Asa W. Field, receiver of the estate of George B. Wiggins, insolvent, to compel Byron A. Snow, circuit judge of Saginaw county, to vacate an order quashing the service and proceedings under a petition filed by relator for an execution for a deficiency arising under a mortgage foreclosure.
    Submitted April 3, 1900.
    Writ granted May 15, 1900.

      Humphrey & Grant, for relator.

      Weadock & Purcell, for respondent.
   Hooker, J.

The petitioner was complainant in foreclosure proceedings wherein John W., John H., and H. Kirk Howry were (among others) defendants. They appeared in the case by resident counsel, who required and 'received a copy of the bill, but did not answer, and a decree was taken pro confesso. This decree recited that they were personally and primarily liable for the debt, and that, unless they should pay the same, the premises should be sold, and a report of sale, including any deficiency, should be made by the commissioner. It was further decreed that “the right is reserved to John W. Howry, John H. Howry, and H. Kirk Howry, and to each of them, to make the defense that they have been discharged in bankruptcy, in any proceeding that may be hereafter had or taken to enforce any deficiency that may be reported by the commissioner in his report of the sale.” A deficiency was reported. All of these three defendants were nonresidents of the State, and each was personally served with a copy of the petition for execution, and the notice of hearing the same, at a place not within this State. No order for a substituted service was procured, but this was waived, so far as it could be, upon the hearing. Copies of the petition and notice were also served upon the solicitors who had represented the defendants in the foreclosure case. They appeared specially, and moved to quash the service and proceedings as invalid, and this motion was granted. We are asked to compel the court to vacate that order, and proceed to hear the questions raised by the petition.

The right to a decree for a deficiency remaining after sale, and application of the proceeds of mortgaged premises to the debt secured, depends upon statute. See Laws of 1833, p. 361, § 37 (Rev. Stat. 1838, p. 376, § 105); 1 Comp. Laws 1897, § 517; Lawrence v. Fellows, Walk. Ch. 470; Johnson v. Shepard, 35 Mich. 122; McCrickett v. Wilson, 50 Mich. 516 (15 N. W. 885). See, also, 9 Enc. Pl. & Prac. 451, 452; McCarthy v. Graham, 8 Paige, 480. Where the bill alleges the necessary facts and contains the requisite prayer, and a subpoena, accompanied by the proper underwriting, is personally served upon a defendant, the court may, in its original decree, determine the question of personal liability for a deficiency. Outhwite v. Porter, 13 Mich. 540; Johnson v. Shepard, 35 Mich. 123; Gies v. Green, 42 Mich. 107 (3 N. W. 283); Booth v. Insurance Co., 43 Mich. 299 (5 N. W. 381); Ransom v. Sutherland, 46 Mich. 492 (9 N. W. 530); Jehle v. Brooks, 112 Mich. 131 (70 N. W. 440); Ward v. Obenauer, 119 Mich. 17 (77 N. W. 305); Simons v. McDonnell, 120 Mich. 621 (79 N. W. 916). Such decree is final, and cannot be afterwards questioned, except upon rehearing or bill of review. Johnson v. Shepard, 35 Mich. 125; Ransom v. Sutherland, supra; Haldane v. Sweet, 58 Mich. 429 (25 N. W. 383); Wallace v. Field, 56 Mich. 3 (22 N. W. 91); Corning v. Burton, 102 Mich. 97 (62 N. W. 1040); Jehle v. Brooks, 112 Mich. 133 (70 N. W. 440); Ward v. Obenauer, supra; Simons v. McDonnell, supra. Before payment can be decreed or execution issued, the amount of the deficiency must be adjudicated, after the report of sale has been made. Johnson v. Shepard, supra; Howe v. Lemon, 37 Mich. 166; Gies v. Green, 42 Mich. 108 (3 N. W. 283); Ransom v. Sutherland, supra. That is the object of the proceeding commenced by the petition.

The crucial question in the case is whether the defendants are properly before the court. It is contended on their behalf that no absolute decree for the payment of a deficiency can be made, except on personal service of a copy of the sworn petition, and notice of the time and place of hearing. We have cases which hold that a decree in personam cannot be made where the defendant is not personally served with proper process. Booth v. Insurance Co., supra; Gies v. Green, supra; Vaughan v. Black, 63 Mich. 218 (29 N. W. 523); Ransom v. Sutherland, supra. But, where this has been done, not only have we held that the decree is final, but also that a substituted service may be made in the supplementary proceeding. It is true that this has been called a “new proceeding,” but it has always been considered supplementary. Johnson v. Shepard, supra,; Ransom v. Sutherland, supra; Shelden v. Barlow, 108 Mich. 377 (66 N. W. 338); Prentis v. Richardson’s Estate, 118 Mich. 259 (76 N. W. 381). And the cases seem to contemplate that something less than personal service will support an execution for the deficiency, which could hardly be said if it were not that the court had already jurisdiction of the parties by the service of the original process. Ransom v. Sutherland, supra; McCrickett v. Wilson, 50 Mich. 515 (15 N. W. 885). The statute has not provided for a service of any particular kind, or by any prescribed method, in such cases; and we are of the opinion that the court might prescribe the kind of 'notice, and method of service, and, although it did not in this case, the notice actually given being a copy of the petition, and information as to the time set for. hearing, served personally upon each defendant and the solicitors, such notice is all that any court could require, and the omission of the order may he treated as an irregularity, which, under the facts in this instance, was waived. There are many other States where the practice of rendering decrees for deficiencies rests upon statutes. In others it is based upon the general rule that equity has power to render full relief when it has jurisdiction of the cause for foreclosure. In others the practice is based upon rules of court, which seems to imply that the original subpoena gives adequate jurisdiction, but that justice requires notice of the supplementary proceeding. In New York, from which it is said that our statute is derived (see Prentis v. Richardson’s Estate, 118 Mich. 262 [76 N. W. 382]), it appears to be unnecessary to wait for confirmation of the report. McCarthy v. Graham, 8 Paige, 480; Bank of Rochester v. Emerson, 10 Paige, 115.

In this case, then, there was substantially a substituted service. We think it was sufficient to support proceedings upon the petition.

The writ is granted.

The other Justices concurred.


source: Caselaw Access Project

author: Montgomery, C. J.

license: Public Domain

text:
    CHICAGO & GRAND TRUNK RAILWAY CO. v. CHAPPELL.
    Railroads — Drain Across Right of Way — Compensation—Constitutional Law.
    2 Comp. Laws 1897, § 4884, providing that, whenever it is necessary to run adrain across the right of way of any railroad, the same proceedings shall be had as in cases provided for obtaining private lands, except as thereinafter provided, and that it shall be the duty of the railroad company, when notified so to do, to make and maintain the necessary opening through said roadbed, and to build and maintain a suitable culvert, is unconstitutional, in so far as it attempts to require the company to make such improvement without compensation, for the benefit of those to whom the drain is an advantage.

      Certiorari to Eaton; Smith, J.
    Submitted April 3, 1900.
    Decided May 15, 1900.

      Certiorari by the Chicago & Grand Trunk Railway Company to review an order of Charles E. Chappell, drain commissioner of Eaton county, requiring it to lower a culvert. From a judgment sustaining the action of the commissioner, plaintiff brings certiorari.

    Reversed.

      L. C. Stanley (F. W. Meddaugh and Geer & Williams, of counsel), for appellant.

      Le Roy Jones (Fred Á. Baker, of counsel), for appellee.
   Montgomery, C. J.

In 1893 proceedings- were instituted to deepen, widen, and straighten the Harris drain, so called. The drain crosses the right of way of the plaintiff in certiorari, and plaintiff was ordered to lower the iron culvert now extending through its roadbed two feet, at an estimated cost of $111. The sole question presented is whether the company can be required to do this without compensation. The statute under which the order was made is section 4334, 2 Comp. Laws 1897, and reads as follows:

‘ ‘ Whenever it is necessary to run a drain across the right of way or roadbed of any railroad, the same proceedings shall be had throughout, in all respects, as in cases provided in this act for obtaining private lands for the construction of drains, except as hereinafter provided. It shall be the duty of the railroad company, when notified by the county drain commissioner so to do, to make and maintain the necessary opening through said roadbed, and to build and maintain a suitable culvert. Notice in writing to make such opening and to construct such culvert shall be served upon such company by leaving a copy thereof with the ticket or freight agent or general officer of such railroad company at least thirty days before such railroad company shall become liable.”

We agree with the counsel for the appellee that this statute shows a legislative intent to require the company to make such improvement without compensation. The question is, Has the legislature power to require this ? The learned counsel for the appellee present an argument of great force in favor of such power, and cite numerous cases from other States which go far towards sustaining their contention. While some of the cases cited may be distinguishable, all of them are not; and, were we at liberty to consider this question as not concluded by our previous holdings, the authorities cited would certainly be entitled to great weight. We find, however, that legislation entirely analogous has been declared unconstitutional by this court in numerous cases. People v. Railway Co., 52 Mich. 277 (17 N. W. 841); Chicago, etc., R. Co. v. Hough, 61 Mich. 507 (28 N. W. 532). See, also, Commissioners of Parks & Boulevards of Detroit v. Michigan Cent. R. Co., 90 Mich. 385 (51 N. W. 447); Same v. Chicago, etc., R. Co., 91 Mich. 291 (51 N. W. 934); Same v. Detroit, etc., R. Co., 93 Mich. 58 (52 N. W. 1083); City of Grand Rapids v. Bennett, 106 Mich. 528 (64 N. W. 585); City of Detroit v. Railway Co., 112 Mich. 304 (70 N. W. 573).

It is contended that the Supreme Court of the United States, in Chicago, etc., R. Co. v. City of Chicago, 166 U. S. 226 (17 Sup. Ct. 581), has laid down a rule in conflict with our decisions, and that we should follow the federal court in determining this question. The opinion of that court is entitled to great weight in any case, and, if our opinions had rested on a provision of the Federal Constitution, would be controlling. It is clear from the first two opinions of Mr. Justice Graves and Mr. Justice Campbell that their rulings were upon section 14, art. 18, of our own Constitution. We do not, therefore, feel justified in overruling a line of our own cases, which have established a rule, on the authority of the case cited, even if the case were in all respects analogous, which it is not.

Following our own authoritative decisions, we are constrained to hold that this act, in so far as it attempts to impose this burden upon the railroad company for the benefit of those to whom the drain is an advantage, is unconstitutional.

The order will be reversed.

The other Justices concurred..


author: Moore, J.

text:
    CITY OF KALAMAZOO v. KALAMAZOO HEAT, LIGHT & POWER CO.
    1. Corporations — Gas Companies — Articles op Incorporation —City Franchise — Parol Evidence.
    Parol evidence is inadmissible to sustain a claim that a gas company was incorporated, and was granted a franchise by a city, for the sole purpose of boring for natural gas, where the articles of incorporation and the local franchise name other purposes, the execution of which is sought to be defeated.
    2. Same — Defective Incorporation — Estoppel.
    After a city has granted a franchise to a gas company, under which operations have been carried on and expenditures incurred, it cannot question its right to corporate existence on account of irregularities in the execution and filing of the articles of incorporation.
    3. Same — Assignment op Franchise
    A proposal hy one corporation- to purchase all real estate and assets, including the franchises, of another, was accepted by the stockholders of the other, who adopted a resolution for that purpose reciting that it sold and conveyed all its real property and assets, together with franchises, for the sum stated in the proposal. The directors were authorized to carry out the arrangement, and they passed like resolutions. Pursuant thereto, a deed of the real estate and appurtenances was made, and the grantee was put into possession of the plant and all other property. Held, that there was a valid assignment of the grantor’s franchises.
    4. Same — Use op Streets — Validity op Grant.
    A city ordinance authorizing a gas company to lay pipes in the streets is not void because it fails to reserve the right to the city to say what streets shall be so used, and the city is bound by its terms.
    5. Same — Conditions op Franchise — Bond for Performance.
    Where a city ordinance granting a franchise to a gas company to lay pixies in the streets provides that the work shall be done under the supervision and direction of the city engineer, and that the streets shall be left in as good condition as they were before, the city may impose reasonable conditions and restrictions as to the manner of doing the work, and may exact a bond of the company before it enters upon the same.
    Appeal from Kalamazoo j Buck, J.
    Submitted April 4, 1900.
    Decided May 15, 1900.
    Bill by tbe city of Kalamazoo to restrain tbe Kalamazoo Heat, Light & Power Company from laying gas-pipes in tbe streets. From a decree for complainant, defendant appeals.
    Reversed.

      Boudeman & Adams (H. JH. Steivart, of counsel), for complainant.

      William G-. Howard and E. A. Crane for defendant.
   Moore, J.

In April, 1887, the Kalamazoo Natural Gas & Fuel Company was organized. The portions of the articles of association which are material read as follows:

“We, the undersigned, desiring to become incorporated under the provisions of the laws of the State of Michigan for the purposes hereinafter stated, do hereby make, execute, and adopt the following articles of association, to wit: * * *

" ‘ The purpose or purposes of this corporation are as follows : To drill, bore, and mine for natural gas, petroleum, and other valuable substances, and to gather and collect the same, and to lay pipes to conduct the same, build reservoirs to hold the same, and to market said natural gas, petroleum, and other valuable substances, when obtained, in such way and manner as shall be considered most expedient and advantageous to said company; also to lay pipes and conduct gas, petroleum, and other valuable substances through, over, and to any place or places in Michigan from places where the same may be produced; also to manufacture gas for the purposes of fuel and generating heat, and to pipe or otherwise conduct the same to market, and to market and dispose of the same; also to purchase and store materials from which such gas may be manufactured; and also to purchase, hold, and lease lands for the purpose of carrying out the objects and purposes of this association.

‘ ‘ The capital stock of the corporation here organized is the sum of ten thousand dollars, and the number of shares thereof is four hundred. The amount of said stock actually paid in at the date hereof is the sum of one thousand and twenty dollars, being ten per cent, of said capital stock. * * * ■

“The term of existence of this corporation is fixed at thirty years from date hereof. ”

Thirty-four persons subscribed to the articles of association. Their acknowledgments were taken before a notary public. The articles of association were on May 7, 1887, filed in the office of the secretary of state, and on the 11th day of May, 1887, in the office of the county clerk of Kalamazoo county. On the 6th of June the common council adopted an ordinance the provisions of which read as follows:

“Ordinance No. 52. Relative to Kalamazoo Natural Gas & Fuel Company.

“ Section 1. The city of Kalamazoonrdains: That permission and authority are hereby given to the Kalamazoo Natural Gas & Fuel Company, of the city of Kalamazoo, a corporation organized under and by virtue of the laws of the State of Michigan, its successors and assigns, to lay, operate, and maintain all such mains and pipes as are or may be necessary and useful in conducting natural gas, and all other substances,- matters, and things used and to be used by the said Kalamazoo Natural Gas & Fuel Company, its successors and assigns, to manufacture or generate or make heat, or to be used for fuel or illuminating' purposes, under the surface of the ground, along and under any and all streets, alleys, and highways of the city of Kalamazoo, and over, upon, or under any and all bridges in said city, for the period of thirty years from and after the date of the passage of this ordinance, with the right and privilege of putting in. the necessary escape pipes; subject, however, to all the conditions, specifications, and limitations hereinafter contained.

“Sec. 2. That said mains and pipes shall be laid at least 20 inches below the surface of the ground, and, when laid, the trenches shall be laid and filled in with earth, stones, or gravel, or of all, so as to leave the streets and alleys through which said pipes may be laid in as good condition as they were previous to the laying of said pipes or mains.

“Sec. 3. That all pipes to be laid under the provisions of this ordinance, and all escape pipes erected, shall be so laid and erected under the supervision and direction of the city engineer of the city of Kalamazoo, subject to the approval of the city council of said city.

“Sec. 4. That the said Kalamazoo Natural Gas & Fuel Company, its successors and assigns, shall charge all consumers of gas and fuel supplied by it the same rate per 1,000 feet for all gas or fuel consumed, and that all within the said city of Kalamazoo desiring to make use of such gas and fuel shall be supplied-by the said Kalamazoo Natural Gas & Fuel Company, its successors and assigns, as soon as practicable, consistent with the ability of said Kalamazoo Natural Gas & Fuel Company, its successors and assigns, so to do.

“ Sec. 5. That the said Kalamazoo Natural Gas & Fuel Company, its successors and assigns, shall have the right to abandon its rights and privileges hereby granted, with right to remove its pipes and mains, but shall restore the streets and alleys to the condition that they were in prior to't-he laying of said pipes.

“Sec. 6. That the provisions of this ordinance shall not be altered, amended, or repealed without the consent of the said Kalamazoo Natural Gas & Fuel Company, its successors and assigns.

“Sec. 7. That the said Kalamazoo Natural Gas & Fuel Company shall signify its acceptance of this ordinance in writing, signed by its president and secretary, and filed with the city clerk of Kalamazoo, within 30 days from the date of the passage of this ordinance, and, in default of such written acceptance, this ordinance and the provisions thereof shall become and be inoperative and void.

“Sec. 8. It shall be the duty of the said Kalamazoo Natural Gas & Fuel Company, and the said company agrees, not to keep any street or place where its pipes may be laid torn up or unsafe for travel any longer than is necessary to lay pipes and make repairs; and said company further agrees to save the said city of Kalamazoo harmless from all expense, damages, and actions it may be put to, sustain, or be brought against it by reason of the said company failing to comply with the terms of this ordinance, or by reason of any neglect of said company, its agents or servants.”

After this ordinance was granted, several thousands of dollars were paid into the treasury, and the company commenced to bore for the purpose of obtaining natural gas. This work was continued the greater part of the year, but without success. Some of the stockholders sold their shares of stock to other stockholders. From time to time committees were appointed for the purpose of visiting other cities, and learning about the methods of making gas, with a view of operating under this franchise. In 1892 a considerable quantity of gas-pipe was distributed on the streets of Kalamazoo by a company that had corresponded with the Natural Gas & Fuel Company, but no pipes were at that time laid. In 1896 the company which is defendant herein was organized under the general laws of the State applicable to gas companies. It is claimed this company was organized in pursuance of an agreement that it should be merged with the Kalamazoo Natural Gas & Fuel Company, which should convey to it its franchise and all other assets, and that residents of Kalamazoo should furnish $0,000 in cash, and the other parties in the new corporation should furnish certain patents, and sufficient money to build the plant, pipe the streets, and put the plant into operation. It is claimed the necessary transfers were made, and a large amount of money raised. The city was notified of the desire of the new company to lay pipes. Under the supervision of the city engineer, about three miles of pipes were laid, and the defendant company began to manufacture and sell gas. One of the principal streets in the city is Burdick street. Prior to, but shortly before, September, 1897, it had been paved with vitrified brick. In September, 1897, the defendant company desired to lay its pipes upon Burdick street, and so notified the city authorities. The authorities objected, because the street had been recently paved, and the pipes could not be laid without injuring the paving. The defendant insisted upon its right to lay the pipes. The city then commenced this proceeding.

The issues, as finally raised by the bill and all the amendments, are as follows: The bill of complaint, as first filed, alleges:

That the Kalamazoo Natural Gas & Fuel Company was never properly organized, in that all of its subscribers did not properly execute the articles of association; and that its sole object was to bore for natural gas, and that all rights under the franchise are limited to that purpose, and would not permit the manufacture of gas, and the city could rescind the franchise at its pleasure.

That the articles of association were not recorded in the register of deeds’ office for Kalamazoo county, and therefore it could not receive a franchise.

That the common council exceeded its authority in issuing franchise No. 52, in that it granted the privilege to the Kalamazoo Natural Gas & Fuel Company to use the streets, without reserving the right to Say what streets, and therefore it was void.

That the consent of the city council was not obtained to the transfer of franchise No. 52 from the Kalamazoo Natural Gas & Fuel Company to the defendant; hence the transfer was void.

That the Kalamazoo Natural Gas & Fuel Company was organized for a purpose different from that stated in its articles of association and in its franchise, and that it abandoned all right to franchise No. 52 more than seven years ago, and therefore it was void.

The original bill was amended twice. After filing the original bill, an injunction was issued, preventing the defendant from laying the pipes on Burdick street. This injunction was modified, and the pipes were laid on that street. The first amendment alleges:

That there was no valid assignment of the franchise from the Kalamazoo Natural Gas & Fuel Company to the Kalamazoo Heat, Light & Power Company.

The second amendment alleges:

That the process used by defendant company for making gas is a failure; that the originator or patentee of the Hall process several years ago attempted to impose upon the people of another locality by using natural gas, claiming it to be made by the Hall process; that later, at Grand Rapids, Mich.,.they attempted to deceive the people as to the amount of gas they furnished; that they also tried to establish a plant to make the same gas at Chicago and Buffalo, and failed; that the present plant was established for the purpose of deceiving people, and for the purpose of, establishing plants elsewhere; that defendant company is insolvent; that defendant’s process for making gas is not practicable, and will not make good gas; that the gas cannot be made as cheap as claimed by defendant company; that defendant’s gas plant sends out an obnoxious gas, so that it has become a public nuisance; that the defendant company is controlled by one Armison and one Cadwell, and neither of them is a taxpayer in Kalamazoo, or pecuniarily responsible; that the defendant has not repaved the streets where it has laid its pipes; that the complainant has had to repair the streets, and the defendant has neglected to repave or repair and pay for the same; that the Hall process for making gas is a fake; that the complainant has the right to disregard all privileges and rights given by Ordinance No. 52.

The case was tried in open court, and a mass of testimony taken. The circuit judge filed a written opinion, in which, after saying it was unnecessary to consider more than one of the questions raised, he then proceeds to say:

‘ ‘ The question is thus fairly and squarely presented whether the defendant company has the right, under Ordinance No. 52, to lay its gas mains and pipes in any streets or alleys of the city of Kalamazoo at pleasure, and, if it so chooses, leave the streets in a dangerous condition, to be repaired at the expense of the taxpayers of the city. This question admits of but one answer. * * *

‘ ‘ Before passing the case, it may not be amiss to say that some of the matters stated in the pleadings, and contested by the parties in their proofs, have not been considered by the court in any way. Whether the process used by the defendant in the manufacture of gas is or is not one which produces the best results, whether the gas manufactured by defendant is or is not commercially valuable, whether such gas can or cannot be furnished at a less cost than other gas, are all matters between the defendant and the consumers of its gas, and are not necessary to be considered in deciding the vital questions involved in the case.

“A decree may be entered perpetually enjoining the defendant, its successors and assigns, from laying gas mains or pipes in, along, or under any street, lane, or alley or public ground in said, city of Kalamazoo, except by permission of the city council of said city, and under .such reasonable conditions and restrictions as may be imposed by said city council.”

A decree was entered in accordance with the opinion. From that decree complainant did not appeal. The defendant company did appeal. It concedes it may not arbitrarily lay its pipes where it pleases, and that the city has a right to supervise the laying of its pipes to see that it is properly done, but insists it has the right, subject to the right of reasonable supervision under the terms of the franchise, to lay its pipes in all the streets of the city.

Many questions are raised by counsel, but we shall not discuss them all.

It is claimed the only purpose of forming the Kalamazoo Natural Gas & Fuel Company, and the granting to it a franchise, was to bore for natural gas. That may have been the principal purpose, but the articles of association and the provisions of the franchise name other purposes, and these terms and provisions cannot be limited by oral testimony.

It is claimed the company abandoned its franchise.' This claim is successfully contradicted by the record.

It is urged there never was a legal corporation known as the Kalamazoo Natural Gas & Fuel Company, because the provisions of the statute were not followed. It is said some of the subscribers to the articles were firms or co-partnerships, only one member of which purported to acknowledge for the firm, and also because four corporations signed for stock, which corporations were not authorized to take stock. It is also objected that the articles of association should have been recorded in the office of the register of deeds, instead of being filed in the office of the county clerk. The statute provides that any number of persons, not less than five, may sign articles of association. Section 7117, 3 Comp. Laws 1897. Upwards of 30 persons properly signed and acknowledged the articles of association, and it is doubtful if any of the irregularities were fatal to the organization of a corporation de jure j but we do not deem it necessary to decide that question. It is apparent an honest effort was made to organize'a corporation in conformity with the provisions of law. Articles of association were prepared, signed, and acknowledged, and filed with public officials. Shares of stock were subscribed and paid for. Officers were elected. A petition was presented to the complainant city for a franchise. The city treated the corporation as one in fact, and granted to it a franchise, under the terms of which it operated and expended a large sum of money. The State has never raised any question about the regularity of the corporation. Under these circumstances we understand the rule established by law as well as reason is that parties recognizing the existence of corporations by dealing with them have no right to object to any irregularity in their organization. Swartwout v. Railroad Co., 24 Mich. 393; Merchants & Manufacturers’ Bank v. Stone, 38 Mich. 779; Toledo, etc., R. Co. v. Johnson, 49 Mich. 148, 55 Mich. 456 (13 N. W. 492, 21 N. W. 888); City of Grand Rapids v. Grand Rapids Hydraulic Co., 66 Mich. 606 (33 N. W. 749); Eaton v. Walker, 76 Mich. 579 (43 N. W. 638, 6 L. R. A. 102); 2 Mor. Priv. Corp. §§ 750-754; Detroit City Ry. v. Mills, 85 Mich. 648 (48 N. W. 1007).

It is insisted the defendant is not the assignee of the Natural Gas & Fuel Company. The oral testimony is that the defendant succeeded to all the rights of the earlier company. The records of that company recite that, at a meeting where 376 out of the 400 shares of the stock of the company were- represented, a proposition had been made by the defendant company to purchase all the real estate, property, and assets, including the franchise, of the earlier company, for $1,000; that a resolution was unanimously adopted “that the proposition * * * be and is hereby accepted, and that this company does sell and convey to said last-mentioned corporation the real estate, property, and assets of all kinds, together with its franchises, and all rights and privileges thereunder, of this corporation, for the cash sum of one thousand dollars.” The directors were authorized to take all necessary measures to carry out the arrangement. . Resolutions of a like character were passed by the hoard of directors. A deed of all the real estate and appurtenances was made to defendant company. The consideration named therein was $1,000. The books and papers of the earlier company were turned over to the later one. Some of the stockholders were paid in money for their stock; others of them exchanged it for stock in the new company. The new company took possession of the plant of the old company, and has since claimed to be the owner of it; and we have no doubt it has succeeded to the rights of the earlier company. Before this suit was brought, upwards of $30,000 had been expended by the two companies. It is doubtless true the ordinance was not a wise one to make, but it was within the power of the council to make it, and the city is bound by its terms.

There is a good deal of testimony tending to show that the defendant company, when it laid its pipes, did not put the street in good repair. It was its duty to do so. It may not tear up the streets, and leave them out of repair. The city may not exclude the company from laying its pipes in any of the streets, alleys, or highways of the city, but it may insist upon the woi’k being done under such reasonable conditions and restrictions as shall make it certain the work will be properly done; and, if it deems it necessary, it may exact a bond for a reasonable amount before the work is entered upon.

The decree of the court below is reversed, and one will be entered here in accordance with this opinion.

Montgomery, C. J., Long and Grant, JJ., concurred Hooker, J., did not sit.


text:
    KOEPPEN v. HARMS.
    Trusts — Evidence—Statements—Competency.
    In a suit to have defendant declared trustee of certain funds, statements of the person from whom defendant received the funds, in relation to his having provided for complainants, made when defendant was not present, are incompetent.
    Appeal from "Wayne; Hosmer, J.
    Submitted April 5, 1900.
    Decided May 15, 1900.
    Bill by John Koeppen and Luella Koeppen, infants, by Helen Thompson, their next friend, against Theodore Harms, Caroline Harms, and others, to enforce a trust. From a decree denying, in part, the relief asked, complainants appeal.
    Affirmed.

      James H. Pound, for complainants.

      Morse Polmert, for defendants.
   Moore, J.

The complainants filed a bill against Theodore Harms for the purpose of having him declared a trustee, having in his possession $2,000, and interest thereon, belonging to complainants. Caroline Harms is the wife of Theodore Harms. The other defendants have no interest in the litigation. The complainants are grandchildren of John Koeppen. Mrs. Harms was his daughter. For a considerable time before his death, Mr. Koeppen made his home with Mr. and Mrs. Harms. It is claimed that, for the purpose of providing a fund of $1,000 for each of the complainants, Mr. Koeppen assigned a mortgage and furnished money to Mr. Harms. The latter admits the assignment of the mortgage, amounting to $1,500, but denies that any money or property other than this came to his hands for the complainants. In his answer he asks to be relieved of his trust. The circuit judge made a decree for the amount of the mortgage and interest, and relieving Mr. Harms from the trust. From that decree, complainants have appealed.

The testimony was taken in open court. A good deal of the testimony offered upon the part of the complainants consisted of statements said to have been made by John Koeppen in relation to his having provided for the complainants. Some of these statements were made when Mr. Harms was not present, and were incompetent. Testimony was also offered tending to show admissions on the part of Mr. Harms. This was contradicted by him. Wills made by Mr. Koeppen, the mortgage, its assignment, the bank accounts of Mr. Koeppen, of Mr. Koeppen and Mr. Harms jointly, the bank account of Mr. Harms, affidavits made in a divorce proceeding between Mr. Koeppen and his last wife, and documentary evidence, were received. The questions involved are purely questions of fact. The testimony was conflicting. The circuit judge heard and saw the witnesses, and, we think, made a proper disposition of the case.

The decree is affirmed, with costs.

The other Justices concurred.


text:
    HENRICH v. SAIER.
    1. Evidence — Deposition—Impeachment—Foundation.
    Evidence will not be admitted to show deponent’s knowledge that a certain mortgage remains unpaid, which in his deposition he claims is paid, without a proper foundation being laid for impeachment.
    3. Same — Hearsay—Admissions—Co-Conspirators.
    In a will contest, evidence that one not a party declared to the witness that contestant had made certain admissions to declarant which, if true, would discredit his (contestant’s) case, is mere hearsay, and not admissible on any theory that the declarant, by corroborating contestant at the trial, showed himself to be a “co-conspirator.”
    3. Same — Contest of Will — Testamentary Capacity — Cross-Examination.
    In a will contest, when, to show testamentary capacity, a witness who was present testified that a few hours after the execution of the will, and shortly before death, a priest attended the testatrix and administered the last sacrament, and that testatrix took part therein and seemed to understand it, it was error to refuse to permit cross-examination as to the nature and extent of the ceremony.
    4. Same — Natural Justice.
    The fact that testatrix, in making her will, treated as an advancement an amount loaned to her son on a certain mortgage, which he had already fully paid, being contrary to natural justice, may be considered by the jury, in connection with other facts, as bearing on the question of her testamentary capacity.

      Error to Ingham; Person, J.
    Submitted April 5, 1900.
    Decided May 15, 1900.
    Mary Henrich and others presented for probate the will of Elnora Saier, deceased. The will was allowed, and William Saier and Jessie E. Saier appealed to the circuit court. Prom a judgment for proponents, contestants bring error.
    Reversed.

      Smith & Hood (Dean & Hooker, of counsel), for appellants.

      John J. Zimmer {L. B. & H. M. Gardner, of counsel), for appellees.
   Montgomery, C. J.

This is a contest over the will of Elnora Saier. The grounds of contest are undue influence and mental incapacity. The record discloses that in 1895 Mrs. Saier had executed a will in which she had devised her property to her children, share and share alike, except William and Joseph. The shares which, had she died intestate, would have been theirs, were devised to their respective wives. Before the making of this first will, Mrs. Saier had loaned to her son William $800 on mortgage security, and had loaned to Joseph Saier $500, and to Charles $500. The will offered for probate was executed on the 11th of January, 1898, the day of the testatrix’s death, and differs from the first will only in that the shares given by the first will to the wives of William and Joseph were given direct to her sons, and that by the will in question it was recited that these loans of $800, $500, and $500, respectively, should be treated as advancements to William, Joseph, and Charles, and deducted from their respective shares, the will reciting that these sums remained unpaid. The testimony tended to show that the mortgage given by William had on the 2d of November, 1894, been formally discharged by Mrs. Saier, and that William had, by her direction, paid the money due thereon to Joseph.

The children of deceased consisted of Mrs. Mary Hen-rich, of Milwaukee; Charles Saier, John B. Saier, Joseph Saier, and Mrs. Kate Savage, of Lansing; William Saier, of Millett; and Clara O’Neil, of Gharlotte. About a week before Mrs. Saier’s death, Mrs. Henrich was sent for, from Milwaukee, and arrived in Lansing five days before the mother’s death. She arrived Friday morning, and her mother died the following Tuesday evening. On her arrival she went to the house of her sister Mrs. Savage, and there had a conversation with Mrs. Savage about William’s mortgage. By her direction, Mrs. Savage wrote a letter to Mrs. O’Neil, at Charlotte, the same morning. The object of the letter was to haye Mrs. O’Neil go to the register’s office and ascertain if William had placed on record a discharge of the $800 mortgage. The next Monday, about 10 o’clock, a telegram was received from Mrs. O’Neil, stating that the mortgage was discharged December 7th. Mrs. Savage and Mrs. Hen-rich were at their mother’s house when the telegram came, and Charles was at work at Mrs. Savage’s house. On receiving the telegram, Mrs. Savage went over and talked with Charles about it, and they then went back to their mother’s house, and read her the telegram and talked to her about it. Mrs. Henrich,.Mrs. Savage, and Charles all assert that their mother denied, at once, having made any discharge of the mortgage, and pronounced it a forgery. There was testimony relating to other facts and circumstances from which an inference of undue influence might be drawn by the jury. There was testimony tending to show a want of memory, in some measure affecting the disposition made of her property by the testatrix. The jury found that the discharge of William’s mortgage was executed and acknowledged by Mrs. Saier, and that she had apparently forgotten this fact, as she charged that it was a forgery.

There are numerous assignments of error based on the admission of testimony. But two of these require discussion.

Charles Saier was permitted to testify to statements of Joseph to the effect that William had admitted to him that the mortgage given to his mother was unpaid. This testimony was hearsay and clearly inadmissible, unless there is some fact to take it out of the rule excluding hearsay testimony. It is suggested that Joseph Saier had testified in his deposition to the payment of the $800 mortgage, and that this made the testimony of his admissions competent; but it does not appear that any foundation for impeaching the testimony of Joseph Saier was laid. It is also suggested that, if the mortgage was not paid, William Saier and Joseph were co-conspirators. We discover no evidence in the case tending to show conspiracy, unless it be in the fact that the testimony of one witness was corroborated by the other upon this point. It would be an exceedingly dangerous doctrine to admit into the law of evidence that, where two witnesses testify to the same state of facts as to the payment of a sum of money, the opposite party is to be permitted to introduce declarations of one not a party, affecting the rights of a party, under the claim that their testimony shows that they are guilty of conspiracy. We think it was error to admit the testimony.

There is one other item .of testimony which was improperly excluded, in our opinion. As tending to show that the testatrix retained her mental faculties, evidence was offered that, a few hours after executing the will, a priest was called to administer the last sacrament, and that Mrs. Saier participated in the service, repeated audibly and properly the prayers, made the sign of the cross at the proper time, and appeared to comprehend the service. On cross-examination of Mrs. O’Neil, who was'called as a witness by proponents,— it appearing that she was present at this time,' — ■ she was interrogated as to what this service consisted of, and, under objection, the testimony was excluded. We think it should have been admitted. It had a direct bearing upon the condition oí the patient.

The charge, in the main, was full and fair, but there is one portion which, while the rule as laid down is, in the main, correct in the abstract, yet, as applied to the facts in the case, was calculated to mislead the jury:

“Neither, in a case of this kind, are you to be moved by any appeals of any kind made to you. I wish those things could be eliminated from the court-room; * * * and all appeals to your prejudice, all appeals to your passion, all appeals of any kind made to you, are simply so many strings to pull you away from the pure question of fact that you have to determine. And when you go to your rooms I want you to act upon your own judgments, upon your own consciences, in the matter. It is not for you to make a will one way or the other; that is none of your business. You have got no more right to make a will for Mrs. Saier, now that she is dead and gone, than you would have had to step into her room when she was living, and impudently dictate to her what she should do with her property. Whether it is such a will as you would have made is immaterial. Whether she did just right, or did not do right, is immaterial. Those are not questions for you. You gentlemen have the control of your own property, and she had the right to control hers, if she was mentally competent.”

It is true that a jury has no right to substitute its own judgment for that of a testator as to what a will ought to be. It is true that whether she did just right was not the ultimate question for the jury to determine. But if she discriminated against William to the extent of this mortgage, claiming that it had not been paid, when in fact it had, this was a circumstance which was to be weighed by the jury, in connection with the other facts in the case, in determining her mental condition, and determining whether she acted under undue influence. It does not require any argument to show that such a provision is against natural justice, and the fact that a provision of the will is against natural justice may be considered, with other facts, as bearing upon this question. Rivard v. Rivard, 109 Mich. 98 (66 N. W. 681, 63 Am. St. Rep. 566).

We think the other questions raised do not call for special discussion. The rule of the case is sufficiently indicatecl by the foregoing. We cannot, however, pass by in silence certain matters contained in the brief of Messrs. Smith & Hood, attorneys for contestants. The brief contains strictures upon the trial judge which are unwarranted by anything which appears in the record, and which have no place in a legal argument. Some allowance may be made for zeal of counsel, but we cannot permit such matter to be spread upon the records of this court, and a repetition of the offense will call for something more than a reprimand.

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

Moore, Long, and Grant, JJ., concurred. Hooker, J.. did not sit.


author: Hooker, J.

text:
    WRIGHT v. BIG RAPIDS DOOR & BLIND MANUFACTURING CO.
    1. Negligence — Independent Contractors.
    The owner of a sash and door factory is not liable for injuries received by a brakeman who was struck and thrown from a car by lumber piled too near the track, where such piling was under the control of one who had contracted with the owner of the factory to take the lumber as delivered from the cars, pile it, put it in the kiln and dry it, and use as much as he should need in the manufacture of doors, at so-much per door, for which purpose the lower floor of the factory -was set apart to him.
    2. Same — Rule Governing Liability.
    The important consideration in such cases is whether the act is one directed by the superior. If the contractor is supervised or controlled by the superior, there may be a liability; but where the contract is for results alone, the contractor being independent and free from direction or restraint' in the performance, the superior is not liable.

      Error to Mecosta; Palmer, J.
    Submitted April 6, 1900.
    Decided May 15, 1900.
    Case by Fred Wright against the Big Rapids Door & Blind Manufacturing Company for personal injuries.From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.

      Charles A. Withey (Frank Dumon, of counsel), for appellant.

      M. Broion {A. B. Cogger, of counsel), for appellee.
   Hooker, J.

The plaintiff, a brakeman of many years’ experience, was injured by being struck and thrown from a freight car by a pile of lumber which stood near the siding, on premises occupied, if not owned, by the defendant, for the purpose. The defendant owned a manufacturing plant, and had been for many years, and was at the time, engaged in manufacturing doors, sash, blinds, and molding. It had entered into a contract with one Falardeau, by which he was to take the lumber from the cars, pile it, put it in the kiln and dry it, take it thence to the mill and manufacture it into doors, and load them upon cars, at an agreed price per door. To do this, he hired and paid the help, but used the premises of the defendant. The doors were manufactured upon the first floor of defendant’s factory, which appears to have been under Falardeau’s control. The other floors were operated by the defendant, whose foreman had charge of them. The -lumber used upon those floors was taken from the piles made by Falardeau’s men. The circuit judge directed a verdict for the defendant upon the ground that the lumber was piled by an independent contractor, for whose misconduct the defendant was not responsible. The plaintiff alleges that this is the only error relied upon. Counsel for the defendant contend that the ruling of the court was correct, upon the ground stated, and for the further reason that the proofs conclusively show that the plaintiff was guilty of contributory negligence; citing Ramsay v. C. K. Eddy & Sons, 123 Mich. 158 (82 N. W. 127), and other cases. The plaintiff claims that the proofs show that Falardeau was not an independent contractor, and that, whether he was or not, the defendant is liable, because it retained the control, or right to control, of the entire premises.

An examination of the record shows that the defendant had control of, and itself carried on business at, the premises in controversy. Its factory was in charge of its foreman. It employed men to do work. It employed Falardeau to make doors “by the piece” in its factory; furnishing him a portion of the factory, and machinery, for the use of himself and his men. It purchased and owned all lumber that was brought upon the premises, and it contracted with Falardeau to put certain work upon it, viz., unloading, piling, transporting to the kiln, and drying it. He used what he needed for making doors, and the rest was used by the defendant for other purposes. The uncontradicted testimony shows that the lumber passed into his possession and control when the car arrived, and it was under his control until it was wanted for use. There is nothing to indicate that the defendant exercised, or had under his contract, the right to dictate how near the track it should be piled. The piling of the lumber was not under its control or supervision, so far as appears from the record. This being so, the defendant was no more chargeable for the negligence of Falardeau’s men in piling the lumber than an owner of goods is for the negligence of a drayman in transporting them. It has been held in such cases that the relation of master and seryant, as ordinarily understood, does not apply. De Forrest v. Wright, 2 Mich. 371; Riedel v. Moran-Fitzsimons Co., 103 Mich. 262 (61 N. W. 509). Had one of Falardeau’s men injured a passer-by, through carelessness, while engaged in unloading or piling the lumber, or in transporting or loading doors upon the car, the defendant would not be liable. As a rule, the law requires the negligent person to recompense one who is injured as the result of his negligence, and masters are held liable for injuries resulting from acts of servants while performing acts for the masters while engaged in their service. But one who can be said to be an independent contractor, over whom the other contracting party has not the right of supervision, direction, and control in the performance of his contract, is himself liable for his negligence and that of his employés, and the other contracting party is not.

Counsel for the plaintiff cite a number of cases which are said to limit this rule, but we think they will be found to rest upon another principle, viz., that the defendants owed duties which they could not avoid by contracting that another should perform the act in which the negligence occurred. Many of these are cases where cities contracted for public improvements in the public highways, it being their duty to keep the streets in a reasonably safe condition. Thus, in City of Detroit v. Corey, 9 Mich. 165 (80 Am. Dec. 78), it was held as to sewers:

“The city takes this power with the understanding that it shall be so executed as not unnecessarily to interfere with the rights of the public, and that all needful and proper measures shall be taken, in the' execution of it, to guard against accidents to persons lawfully using the highways at the time. The city is bound for the performance of these obligations, and cannot rid itself of their performance by executing the power through an agent. ”

Even this doctrine does not meet the approval of Mr Justice Campbell. 9 Mich. 188.

Again, in Darmstaetter v. Moynahan, 27 Mich. 188, it was held that one who was acting under authority from the municipal authorities to incumber a street for the purpose of filling his ice-house could not shield himself from liability for injuries caused by unlawfully obstructing the street with fragments of ice, under an objection that his employe was a contractor, and alone liable. The Corey Case was said to rule that case, and the liability was distinctly put upon the ground that, under the facts, the relation of principal and agent existed.

In McWilliams v. Mills Co., 31 Mich. 274, the defendant had a franchise under which it operated a railway upon a public street. The court held that it was charged, under its franchise, with seeing that the public was protected against, and that it was liable for, negligence in operating the road, though done under a contract by another person. The court said:

“Under these circumstances, all persons using the track for such purposes used it as the agents of defendant, and defendant was liable for their conduct. The relation of principal and agent or master and servant may exist between a corporation and an employer as well as between individuals; and the use of a special franchise, under the direction and for the purposes of its owner, can never be maintained, except as his act. This we have held repeatedly in regard to railroad tracks. It was so held in Gardner v. Smith, 7 Mich. 410 (74 Am. Dec. 722), and in Bay City, etc., R. Co. v. Austin, 21 Mich. 390; and the same principle was recognized in Continental Improvement Co. v. Ives, 30 Mich. 448, and Grand Rapids, etc., R. Co. v. Southwick, Id. 444.”

In Southwell v. City of Detroit, 74 Mich. 438 (42 N. W. 118), the city was held liable for negligence of a paving company, upon the theoi-y that it could not avoid its responsibility to protect the public. Another case substantially on all fours with the Southwell Case is Monje v. City of Grand Rapids, 122 Mich. 645 (81 N. W. 574), where several authorities not cited will be found. These cases turn upon a radically different rule, and do not support the proposition that one having a service to be done cannot avoid liability for the acts of an independent contractor to whom he lets the work.

The same principle is involved in Hawver v. Whalen, 14 L. R. A. 828 (49 Ohio St. 69, 29 N. E. 1049). In the copious notes to this case will be found many cases to the same effect. See, also, Bailey v. Mayor, etc., of New York, 3 Hill, 543 (38 Am. Dec. 669), where it was said:

“If we are not mistaken in that conclusion, and they are to be regarded as a private company, like any other body of men upon whom special franchises have been conferred for their own private advantage,' — -such as banking' and railroad corporations,' — then the appointment of the agents by the State did not make them less the agents of the defendants. The appointment in this way is but one of the conditions upon which the charter was granted, and stands on the footing of any other condition to be found in the grant subject to which it has been accepted. By accepting the charter, the defendants thereby adopted the commissioners as their own agents to carry on the work. The acceptance was entirely voluntary, for the State could not enforce the grant upon the defendants against their will. This would be so upon general principles (Ang. & A. Corp. 46-50, and cases there cited), but here the charter itself left it optional with the common council of the city to accept or not (Laws 1834, chap. 256, § 7). The undertaking of the work was made to depend upon the approval of the plan of the commissioners, which necessarily involved the right to adopt or reject the work itself altogether, if they disliked the system prescribed by the legislature. The approval having taken place, this, together with the subsequent measures of the common council instructing the commissioners to proceed in the execution of the work, constituted them the agents of the defendants, — as effectually so as if the latter had originally appointed them. The act of adoption in the one case was as free and voluntary as the appointment in the other.”

Counsel make the further point that:

“ Where the superior is in possession of fixed property, as real estate, upon which some service is to be performed, he is liable for the negligence of independent contractors; for in such cases the use of the-property is confined by law to himself, and he should take care that that use and management works no injury to others, and, of consequence, that he brings no persons there who do any mischief to others.”

This language is taken from a dictum of Mr. Justice Martin in Moore v. Sanborne, 2 Mich. 529 (59 Am. Dec. 209). In this connection we refer to De Forrest v. Wright, 2 Mich. 371, where the proposition is repudiated in the following language:

“A distinction was adverted to at the bar, in the argument of this case, as existing between fixed real property and personal chattels; and such a distinction seems for awhile to have been recognized by the English judges. Bush v. Steinman, 1 Bos. & P. 404; Laugher v. Pointer, 5 Barn. & C. 547; Quarman v. Burnett, 6 Mees. & W. 499. That distinction, however, has ceased to exist. It is no longer the doctrine of the English courts, unless the act complained of amounts to a continuing nuisance. Earle v. Hall, 2 Metc. (Mass.) 353; Reedie v. Railway Co. and Hobbit v. Same, 4 Exch. 244, 254.”

Some Massachusetts cases are cited in support of this doctrine. In Earle v. Hall, 2 Metc. (Mass.) 353, it was held:

“The general owner of real estate is not answerable for acts of carelessness, negligence, and mismanagement committed upon or near his premises, to the injury of others, if the conduct of the business which causes the injury is not on his account, nor at his expense, nor under his orders or efficient control. Where A. agreed to convey land to B., and B. agreed to build a house thereon and pay for the land, and, while the agreement was in force, B., in preparing to build the house on his own sole account, by workmen employed by himself alone, undermined the wall of the adjoining house of C., whereby it was injured, it was held that A. was not answerable for this injury, although the title to the said land remained in him at the time when the injury was committed.”

It is not, therefore, an authority supporting the rule contended for.

The case of Stone v. Codman, 15 Pick. 297, was where an adjoining proprietor brought an action for an injury resulting from the negligent making of a drain upon defendant’s land, thereby .letting water into his cellar. This case is not in point, and more closely resembles the first class cited. The landowner always owes a duty to so use his land as not to injure an adjoining proprietor, as by setting fires, draining land, etc., and he cannot avoid it by hiring another to set fires or lay drains. Robbins v. Chicago City, 4 Wall. 657.

Hilliard v. Richardson, 3 Gray, 349 (63 Am. Dec. 743), is another case cited. There a carpenter, who had contracted to build a house upon defendant’s land, obstructed the highway, causing an injury. The landowner was held not liable. The authorities were reviewed in that case, and Bush v. Steinman, 1 Bos. & P. 404, cited by counsel in this case, was repudiated. The trial court had instructed the jury that ‘ ‘ the act of laying and leaving the boards in the highway by Shaw must, for the purposes of this action, be deemed the act of the defendant,” and that, “as the boards at which it was alleged the horse took fright were procured by Shaw, to be used, in whole or in part, in performance and execution of the written contract between him and the defendant, and were materials necessary therefor, the defendant was responsible for the acts of Shaw in placing the boards in the highway and suffering them to remain there, and that his liability in relation thereto was in all respects the same as the liability of Shaw.” The appellate court said:

“We have thus, at the risk of tediousness, examined the case at bar as one of authority and precedent. The clear weight and preponderance of the authorities at common law is against the rule given to the jury. The rule of the civil law seems to have limited the liability to him who stood in the relation of 'paterfamilias to the person doing the injury. Inst. lib. 4, tit. 5, §§ 1, 2; 1 Dom. Civ. Law, pt. 1, lib. 2, tit. 8, § 1; Dig. lib. 9, tit. 2, § 1. Viewing this as a question, not of authority, but to be determined by the ápplication to these facts of settled principles of law, upon what principle can the defendant be held responsible for this injury ? He did not himself do the act which caused the injury to the plaintiff. It was not done by one acting by his command or request. It was not done by one whom he had the right to command, over whose conduct he had the efficient control, whose operations he might direct, whose negligence he might restrain. It was not an act done for the benefit of the defendant, and from the doing of which an implied obligation for compensation would arise. It was not an act done in the occupation of land by the defendant, or upon land to which, upon the facts, he had any title. To say that a man sháll be liable for injuries resulting from acts done near to his land is to establish a rule as uncertain and indefinite as it is manifestly unjust. It is to make him liable for that which he cannot forbid, prevent, or remove. The case cannot stand on the relation of master and servant. It cannot stand upon the ground of nuisance erected by the owner of land, or by his license, to the injury of another. It cannot stand upon the ground of an act done in the execution of a work under the public authority, as the construction of a railroad or canal, and from the responsibility for the careful and just execution of which public policy will not permit the corporation to escape by delegating their power to others. It can only stand where Bush v. Steinman, when carefully examined, stands,— upon the general proposition that a person shall be answerable for any injury which arises in carrying into execution that which he has employed another to do, to adopt which would be to ignore all limitations of legal responsibility.”

See, also, Moore v. Sanborne, 2 Mich. 519 (59 Am. Dec. 209).

The important consideration in such cases is whether the act is one directed by the superior. If it is done by one whose work is supervised or controlled by the superior, there may be a liability; but where the person whose negligence has caused the injury has contracted only for results, and is independent and free from direction or restraint in the performance of his obligation, the superior is not liable, in a case like the present.

The court was not in error, and the judgment is. affirmed.

The other Justices concurred.


author: Moore, J. Per Curiam.

text:
    LYON v. CLARK. LYON v. HAZLE.
    1. Bankruptcy — Fraudulent Conveyances — Bill to Set Aside —Jurisdiction op State Courts.
    The State courts have jurisdiction of proceedings instituted by a trustee in banknrptcy to reach property transferred contrary to the provisions of the bankruptcy law.
    2. Federal Statutes — Construction by Federal Court — Conflicting Opinion of State Court.
    A construction given to a Federal statute by the United States Supreme Court should control future decisions of the State courts, though not in accord with oxiinions theretofore announced by them.
    Appeals from Clinton; Daboll, J.
    Submitted April 6, 1900;
    opinion filed May 15, 1900.
    Rehearing ordered July 7, 1900;
    former decision reversed October 2, 1900.
    Bills by Willard C. Lyon, trustee in bankruptcy of the estate of Fred E. Hazle and Frank B. Clark, against Nathaniel J. Clark and wife, and against Robert Hazle and others, to set aside certain conveyances alleged to have been made in fraud of the bankruptcy law. From orders overruling demurrers - to the bills, defendants appeal.
    Affirmed,.

      Edwin H. Lyon and Almond G. Shepard (Otto Kirchner and Bacon & Yerkes, of counsel), for complainant.

      High & Everett (Spaulding, Norton & Dooling, of counsel), for defendants.
   Moore, J.

These cases were heard as one, and the disposition of one case disposes of both. The complainant filed bills to set aside certain conveyances of property made by Fred E. Hazle and Frank B. Clark, as being in fraud of the bankruptcy law. Demurrers were interposed to the bills. The demurrers were overruled. The only question we deem it necessary to discuss is whether the court should take jurisdiction of the cases. The authorities are very conflicting. In the case of Brigham v. Claflin, 31 Wis. 607 (11 Am. Rep. 623), the court makes use of the following language:

“But the practical difficulties which will necessarily result if a State court at law should entertain suits brought by assignees concerning the property and debts of the bankrupt are scarcely less grave and serious than the complications which might arise in equitable actions. In the first place, it must be obvious that the assertion of a State jurisdiction in such causes will greatly tend to protract and multiply suits in respect to the bankrupt’s estate, and will inevitably be a. most fruitful source of conflict and collision between the State and Federal tribunals. The object and policy of the bankrupt law manifestly are to collect and distribute the property of the bankrupt among his creditors as promptly as practicable; and these ends can be much more readily accomplished by the United States courts, which have plenary jurisdiction in these matters, than by tribunals acting by different modes, and deriving their powers from other' sources. Some of the remarks made by Mr. Justice Story in the case of Ex parte Christy, 3 How. 292, in reference to the provisions of the bankrupt law of 1841, express my own views so well upon this subject that I cannot do better than quote them. He.says:

•“ ‘The obvious design of the bankrupt act of 1841, chap. 9, was to secure a prompt and effectual administration and settlement of the estates of all bankrupts within a limited period. For this purpose it was indispensable that an entire system adequate to that end should be provided by Congress, capable of being worked out through the instrumentality of its own courts, independently of all aid and assistance from any other tribunals over which it could exercise no effectual control. * * * If we are told that resort may be had to the State courts for redress, our answer is that Congress did not intend to trust the working of the bankrupt system solely to the State courts of twenty-six States, which were independent of any control by the general government, and were under no obligations to carry the system into effect. The judicial power of the United States is, by the Constitution, competent to all such purposes; and Congress, by the act, intended to secure the complete administration of the whole system in its own courts, as it constitutionally might do.’ Pages 312, 320.

“These remarks indicate clearly that, according to the judgment of this eminent judge, sound policy and a just regard to public as well as private interests require that the jurisdiction of the district and circuit courts of the United States over all cases arising under the bankrupt law should be exclusive of the State courts. And I cannot but think that Congress has in fact vested in those courts this complete and exclusive jurisdiction over ‘all acts, matters, and things to be done under and in virtue of the bankruptcy, until the final distribution and settlement of the estaté of the bankrupt,’ including, of course, such jurisdiction and power as may be essential for ‘the collection of all the assets of the bankrupt,’ independently of all aid and assistance from any State tribunals, over which it could exercise no effectual control. See, also, McLean v. Lafayette Bank, 3 McLean, 185; Peck v. Jenness, 7 How. 612. But, even if I had any doubt about this being the proper construction of the bankrupt law, I should still think it was more consistent with the dignity and independence of the State tribunals to decline to take jurisdiction of cases arising under that act, if such jurisdiction theoretically existed, rather than expose themselves to collisions and conflicts with the United States courts, or subject their proceedings to the control of those courts in attempting to adjudicate them.”

This case was followed in Bromley v. Goodrich, 40 Wis. 131 (22 Am. Rep. 685). See Hecht v. Springstead, 51 Iowa, 502 (1 N. W. 773); Seavey v. Maples, 94 Ind. 205.

In Re Newberry, 97 Fed. 24, the present bankruptcy law was construed by Judge Severens. His conclusion is that bills filed by trustees in bankruptcy to reach property transferred contrary to the provisions of the bankruptcy act should be brought in the United States courts. He makes use of the following language:

“An anomalous state of things would be presented if the bankruptcy court, which is charged with the duty of prompt action in collecting and distributing the estate of the bankrupt, should be compelled to await, and be balked by, the pendency of proceedings in another court having a jurisdiction entirely foreign to its own, and in no manner subject to it. The reasons for finding, if fairly practicable, a construction which will avoid such inconvenience, are quite fully stated hy Judge Baker in Carter v. Hobbs, 92 Fed. 594, and, indeed, are obvious.”

See In re Woodbury, 98 Fed. 833; In re Hammond, Id. 845.

The questions involved here are not new in this State. They were discussed in Voorhies v. Frisbie, 25 Mich. 476 (12 Am. Rep. 291), where Justice Campbell, speaking for the court, used the following language:

“We do not deem it necessary to consider, for the purposes of .this case, to what extent assignees may sue at law, on the same footing and with the same rights as private persons, to recover upon contracts or legal liabilities, or in equity, to enforce such liens and obligatidns as involve the same kind of interests. No such difficulties would arise at law as may arise in equity, and it may be there are classes of equitable proceedings which could raise no complications. The present case is one where no cause for equitable interference could exist in this State in favor of private parties, upon the facts alleged. No creditor who has not obtained a lien or judgment, and who has not, in seeking to enforce that lien or judgment in the ordinary way, found it necessary to assail the conveyance of his debtor’s property as fraudulent, can complain of it. And a transfer for a valuable consideration and in good faith, though made by a person known to be insolvent, would not, in the absence of a bankrupt law, be necessarily void as against any one, as it would not necessarily impair the rights of creditors. Our laws have never prohibited honestly-made preferences. The rights of assignees under the bankrupt law rest largely on new and purely statutory grounds. And where a sufficient power exists in the.courts of the United States, not only to enforce those rights, but to do it more conveniently and effectually, in connection with the administration of the whole estate, there is no necessity, and, we think, no propriety, that we enlarge our own jurisdiction to interfere directly in matters beyond our full control.

“The peculiar advantages of equity jurisdiction depend almost entirely on the power of courts of equity to do full justice by a complete control over the matters in controversy, directly, or by personal coercion of the parties. The rule is almost universal that no interference will be exercised unless this complete power exists to compel justice to be done throughout. Specific performance, which is one of the commonest forms of relief, will seldom be granted where there is not a mutual liability to the jurisdiction, or where the court has not the means of seeing .that its decree shall be carried out. It will not entertain a bill where it could not obtain the means of enforcing a cross-bill, if one should become proper, so as to compel both parties to do equity. In maintaining jurisdiction in favor of a foreign state, in U. S. v. Wagner, 2 Ch. App. Cas. 582, the English court of chancery maintained the jurisdiction, with the express assertion that, in case a cross-bill should be filed, proceedings should be stayed until the complainant in the original bill should submit to it. And in U. S. v. McRae, 3 Ch. App. Cas. 79, the principle was further recognized that equities connected with the matter in controversy were entitled to be enforced. This doctrine is elementary, and is incident to equity jurisdiction.

“In all controversies concerning conveyances alleged to have been made in fraud of creditors, it is competent, and generally necessary, to inquire into consideration and notice; and, under the rule in this State, there may be many cases where purchasers, not entitled to hold the entire title, maji- be protected in their partial payments, and authorized to demand repayment of moneys and cancellation of securities, and in some cases to ask reconveyance of property or reassignment of obligations. There may also be a right to an accounting. There certainly can be no jurisdiction in a State court to deal with a fund in bankruptcy, and direct the course to be taken by the assignee; and the assignee would have no power, in some cases, at least, to submit himself to such a jurisdiction. There are some arrangements which he can make with the leave of the bankrupt court, but not without. His powers and duties, as prescribed by the bankrupt law, would not permit any but the courts taking jurisdiction under the statute to adjust all the equities by compulsion. This, we think, is a conclusive objection to entertaining jurisdiction in such suits as the present, 'if the jurisdiction could properly be said to exist. But it would be a misnomer to speak of - such a jurisdiction as existing, and yet not plenary. The constitution of our courts of equity gives them.no such hampered powers, and it would not be promotive of justice if these limited powers had been given. They could not disregard the bankrupt law, without violating their legal duty; and they have not the means of controlling proceedings under it, which are necessary to prevent injustice otherwise resulting from the application of single clauses, or the separation of transactions, where all need to be administered by one set of tribunals.”

This case was followed in Sheldon v. Rounds, 40 Mich. 425; McMaster v. Campbell, 41 Mich. 513 (2 N. W. 836).

The execution of the provisions of the bankruptcy law can well be left to the Federal courts, where there will be uniformity in its execution.

The circuit judge should have sustained the demurrers. The decrees are reversed, and the bills dismissed, with costs of both courts. -

The other Justices concurred.

ON REHEARING.

Per Curiam.

Because of the opinion rendered by the Supreme Court of the United States in the late case of Bardes v. Hawarden Bank, 178 U. S. 524 (20 Sup. Ct. 1000), the court ordered a rehearing in these cases.

In the Case of Bardes the court construed the provisions of the Federal bankruptcy act, and reached a different conclusion from the one reached in this court. See, also, Hicks v. Knost, 178 U. S. 541 (20 Sup. Ct. 1006). We are all of the opinion that the construction given to a Federal statute by the United States Supreme Court should control, though not in accord with the earlier decisions of the State court. Entertaining this view, the opinion heretofore announced in these cases must be reversed, and the action of the lower court sustained.

The decrees of the lower court are affirmed, without costs.


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    PEOPLE’S SAVINGS BANK v. CAMPAU.
    Penal Bond — Sum Certain — Interest in Excess — Recovery as Damages for Nonpayment.
    Where, in an action upon a penal bond in a sum certain, given to secure notes to that amount, defendants paid part of the notes before trial, and at the trial it appeared that the balance due, without interest, exhausted the bond, it was error to render judgment for such balance with interest as damages for nonpayment, since the penalty could not be enlarged.
    Error to Wayne; Waite, J.
    Submitted April 6, 1900.
    Decided May 15, 1900.

      Assumpsit by the People’s Savings Bank against Daniel J. Campau and others upon a bond. Prom a judgment for plaintiff on verdict directed by the court, defendants bring error.
    Modified.

      Moore <& Moore, for appellants.

      Keena & Lightner, for appellee.
   Moore, J.

The plaintiff commenced suit against defendants by summons in a plea of trespass on the case upon promises. It set up in its declaration a bond reading as follows:

“Know all men by these presents, that we, Ered T. Moran, E. E. Palms, Daniel J. Campau, George M. Vail, all of the city of Detroit, and W. L. Churchill, of Alpena, Michigan, are held and firmly bound unto the People’s Savings Bank, a body corporate under the laws of the State of Michigan, in the sum of thirty -thousand dollars ($30,000), lawful money of the United States, to be paid the said People’s Savings Bank, its successors or assigns, for which payment well and truly to he made we bind ourselves, our and each of our heirs, executors, and administrators, firmly by these presents.

“Sealed with our seals, and dated this 29th day of November, 1895.

“ Whereas, the Detroit Driving Club, a body corporate, duly organized and being under and by virtue of the laws of the State of Michigan, in which we are stockholders, is desirous of procuring a line of credit with the said bank in an amount not to exceed at any one time the sum of thirty thousand dollars, and for that purpose has delivered, and will from time to time make and deliver to and negotiate with said bank, its promissory notes, in such amounts, payable at such times and on such terms and conditions, as may be suitable to said bank: Now, therefore, the condition of this obligation is such that if said bank will give to said company a line of credit not to exceed the sum of thirty thousand dollars at any one time on such notes -now held by said bank, or hereafter discounted, transferred, or negotiated with said bank, and that said company, the Detroit Driving Club, shall well and truly pay or cause to be paid unto the above named, the People’s Savings Bank, its successors or assigns, all sums of money now or hereafter advanced upon such promissory notes made, indorsed, or negotiated with said bank by said company, then this obligation will be void and of no effect; otherwise to remain in full force and virtue. This is a continuing guaranty, to be enforced or terminated bysaid bank, or by any of the signers hereof by written notice to said bank.”

In answer to a demand for a bill of particulars, plaintiff answered its claim was solely upon the bond. After the suit was brought, defendants paid to plaintiff $18,000, and a receipt was given them, in which it was recited the payment was made to apply upon the liability on said bond. Upon the trial one note for $15,000, dated October 21, 1897, and another for a like amount, dated November 11, 1897, were introduced in evidence. The interest on these notes to the day.of judgment amounted to $2,286.50, after deducting the interest upon the payment, leaving due upon the notes $14,286.50, for which amount the circuit judge directed the jury to return a verdict in favor of plaintiff.

It is the claim of the counsel for the plaintiff:

.“That at law, in an action upon a penal bond, interest nay be recovered in the form of damages to an amount exceeding the penalty of the bond; that the plaintiff in an action upon a penal bond, with the condition for the payment of money only, is entitled to recover the full amount of the penalty as a debt, and the excess of interest beyond the penalty in the shape of damages for the detention of the debt;” citing Robbins v. Long, 16 N. J. Eq. 59.

They make the further claim that it is clear from the whole instrument that the sum nominated was not intended as a penalty, but as a limit of the credit to be given the driving club, of which the obligors guarantee payment; and, on either view of the case, treating the instrument as a contract or as a bond, the judgment of the court below should be affirmed.

The defendants contend for the following propositions:

1. A judgment cannot be entered for more than the penal sum of a bond.

2. When the bondsmen have voluntarily paid the full penalty of the bond, there is no further liability.

3. When the bondsmen have made a voluntary payment on the bond, judgment cannot be rendered against them for more than the difference between the amount paid and the penal bum of the bond; and, therefore, judgment in this case should have been directed for only $12,000.

The authorities are conflicting upon these propositions. Speaking for myself, if the case were one of first impression, I should be inclined to think the weight of modern authority favored the contention of the plaintiff; but the questions were long ago decided in this State against the contention of the plaintiff. In Fraser v. Little, 13 Mich. 195, Justice Christiancy wrote a dissenting opinion, arguing in favor of the position taken in this case by the plaintiff, but his opinion did not prevail. On the contrary, in that case the court held that the views expressed by Justice Christiancy were in direct conflict with the mass of decisions, and in conflict with the principle which underlies them all, that a penalty is not to be enlarged under any circumstances, and will not be enforced beyond its letter. In Spencer v. Perry, 18 Mich. 394, the opinion was written by Justice Christianoy, who used the following language, showing he no longer questioned Fraser v. Little:

“This was an action of debt upon a bond with a penalty of $6,000, conditioned for.the payment by defendant of all the debts of the late firm of Spencer & Newcombe, and to indemnify the plaintiff, one of said firm, against such debts. The declaration was in the usual form, demanding the penalty of the bond. The plaintiff’s right of action and the defendant’s obligation to pay rested wholly upon the bond. After the éxecution of the bond, and before the bringing of the action, the defendant had paid debts of the firm to an amount exceeding the $6,000, the penalty in the bond. It is admitted that if the defendant had paid nothing upon the debts of the firm, and suit had been brought upon the bond, the amount of recovery would have been limited to the amount of the penalty. 2 Comp. Laws 1857, §§ 4509-4517. But it is insisted that a voluntary payment, without suit, of any amount of the debts mentioned in the condition, though exceeding the penalty, is no satisfaction of the bond. If this be so, it will certainly be for the interest of all obligors in such bonds to pay nothing until compelled by suit. But we see no intelligible ground for any distinction in such cases between a voluntary and a compulsory payment. If a party choose voluntarily to perform ,his obligation to the full extent that the law could enforce it, we are at a loss to perceive why the payment should not be recognized as equally meritorious and effectual as if made at the end of the lawsuit. See Clark v. Bush, 3 Cow. 151; Lyon v. Clark, 8 N. Y. 154, and cases there cited. The law is not so tenacious of its prerogatives as to prevent parties from performing their obligations of their own accord without the compulsion of legal process. * * * The present bond was a contract between private parties, and one chief object of putting it in the form of a bond with a penalty must, according to the general understanding in such cases, be supposed to have been to fix the limit beyond which the liability of the defendant should not extend. Another object may have been to enable the obligee to enforce it by action of debt, instead of covenant. The legal effect of the bond, as to the extent of liability, does not differ from that of a covenant, without a penalty, to pay the debts of the firm to an amount not exceeding $6,000. If the parties had intended to provide for a liability to an indefinite extent, to be limited only by the amount of the debts of the firm, whatever they might be, the obvious mode of creating such a liability was by a covenant to that effect without a penalty, or by making the penalty of the bond so large as, in any event, to exceed the debts, as the parties probably supposed they had done here. ”

This view of the law was reaffirmed in the same case, reported in 23 Mich. 89. See, also, Odd Fellows v. Morrison, 42 Mich. 521 (4 N. W. 739).

In White Sewing-Machine Co. v. Dakin, 86 Mich. 581 (49 N. W. 583, 13 L. R. A. 313), Justice Champlin used the following language:

“The penalty of this bond is $1,000, no more and no less; and no recovery can exceed that amount. Bishop v. Freeman, 42 Mich. 533 (4 N. W. 290); Odd Fellows v. Morrison, 42 Mich. 523 (4 N. W. 739); Spencer v. Perry, 18 Mich. 394. The damages, including the interest, where it is proper to allow it to be assessed under the conditions, cannot exceed the penalty; and, if they equal the penalty, they can only draw interest from the date of the judgment.”

We are not inclined to overrule what has been the settled law of the State for over 35 years. The amount of the recovery should have been limited in the court below to $12,000. The judgment is reversed, and judgment will be entered here for that amount.

The other Justices concurred.


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    KERR-MURRAY MANUFACTURING CO. v. KALAMAZOO HEAT, LIGHT & POWER CO
    1. Mechanics’ Liens — Contractor’s Statement — Right op Lien.
    Under section 4 of the mechanic’s lien law (3 Comp. Laws 1897, § 10713), requiring that original contractors furnish to the owner sworn statements, giving the names of all subcontractors, laborers, and material men under their contracts, with the amount due each, before they shall have any right of action or lien against the owner, where, by the terms of the contract, labor is to be expended on the premises, such statement is indispensable, notwithstanding the owner and the contractor are the only parties interested.
    2. Same — Material Men.
    Manufacturers who sell window frames, sash, and doors, made in their own shops, for use-in a building in process of erection, are material men, to whom the above requirement does not apply.
    3. Same — Mortgage—Priorities.
    Under section 9, subd. 3, of the mechanic’s lien law (3 Comp. Laws 1897, § 10718), providing that such liens shall be preferred to all other titles, liens, or incumbrances which may attach to or upon the building or land subsequent to the commencement of such building, a mechanic’s lien takes precedence of a mortgage executed after the actual commencement of the building, although the contract for furnishing the materials for which the lien is claimed was not entered into until after the execution and recording of the mortgage. Kay v. Towsley, 113 Mich. 281, followed.
    Appeal from Kalamazoo; Buck, J.
    Submitted April 10, 1900.
    Decided May 15, 1900.
    Bill by the Kerr-Murray Manufacturing Company against tbe Kalamazoo Heat, Light & Power Company and others to enforce certain mechanic’s liens. From a decree for complainant, defendants appeal.
    Modified.

      Walter B. Taylor and Osborn, Mills & Master, for complainant.

      E. A. & Bobert B. Crane, for defendants.
   Montgomery, C. J.

This is a bill filed to enforce two mechanic’s liens. Complainant in June, 1897, entered into a written contract to furnish to defendant company a steel gas-holding tank, “all delivered and erected on foundations” provided by defendant company, to be paid for, 50 per cent, on delivery of materials, 25 per cent, during erection, balance on completion and satisfactory test. The claim of lien filed with the register of deeds states that the last of the material was furnished on the 27th of November, 1897, and the last of the labor was performed on the 30th day of November, 1897. Complainant is also assignee of the Van Bochove & Sons Manufacturing Company,, which company filed notice of a lien for window frames, sash, and doors sold to the defendant company, to be used in a building on its premises. From a decree declaring a lien in favor of complainant under both claims, defendants appeal.

It is claimed that the bill in this case was not in season to preserve the lien under the contract with the Kerr-Murray Manufacturing Company, as the contract was made when the statute of 1893 was in force, providing that liens shall continue six months after filing claim of lien with the register of deeds, and no longer, unless proceedings are begun, etc. As this lien must be disposed of on other grounds, we do not find it necessary to determine whether the amendment of 1897, fixing the period of one year, controls in this case. This objection has no application to the claim of the Van Bochove & Sons Manufacturing Company, as its claim arose after the law of 1897 took effect.

It appears that no notice was served on defendant company stating the names of subcontractors, laborers, or material men, as required by section 4 of the act (3 Comp. Laws 1897, § 10713), which provides:

“The original contractor shall, whenever any payment of money shall become clue from the owner, part owner, or lessee, or whenever he desires to draw any money from the owner, part owner, or lessee on such contract, make out and give to the owner, part owner, or lessee, or his agent, a statement under oath of the number and names of every subcontractor or laborer in his employ, and of every person furnishing materials, giving the amount, if anything, which is due or to become due to them or any of them for work done or materials furnished; and the owner, part owner, or lessee, or his agent, may retain, out of any money then due or to become due to the contractor, an amount sufficient to pay all demands that"are due or to become due to such subcontractors, laborers, and material men, as shown by the contractor’s statement, and pay the same to them according to their respective rights, and all payments so made shall, as between such owner, part owner, or lessee and such contractor, be considered the same as if paid to such original contractor. Until the statement provided for in this section is made in manner and form as herein provided, the contractor shall have no right of action or lien against the owner) part owner, or lessee on account of such contract.”

It is stated in complainant’s brief that the record is silent as .to whether such a notice was or was not served; but counsel evidently overlook the testimony of complainant’s witness Hackius, who testified as follows: “We never served any notices on defendant company, nor filed on record any notices, except these that have been offered in evidence.” No notice or statement such as required by section 4 was offered in evidence, and we think the testimony, fairly construed, shows that none was served. This being so, it follows that the complainant is not in a position to assert a lien, unless we say that it was not a contractor, but a material man, or that defendants are in some way estopped from asserting this defense. Sterner v. Haas, 108 Mich. 488 (66 N. W. 348); Wiltsie v. Harvey, 114 Mich. 131 (72 N. W. 134); Dittmer v. Bath, 117 Mich. 571 (76 N. W. 89). It is insisted by complainant’s counsel that the record shows that there are no other parties than the complainant interested, and hence that there was no necessity for a notice. It will be noticed that the section quoted requires notice by the contractor of the names of laborers in his employ, and while this notice is not required from a material man, as distinguished from a contractor, and perhaps not of a contractor as to work expended on material before it is devoted to use under the contract, yet when, by the terms of the contract, labor is to be expended on the premises, it is clear that this statement is required. Sterner v. Haas, supra. In this case it appears by the contract itself that labor was to be expended tin the premises. It also appears by the statement of lien that labor was in fact performed after the last of the material was furnished. The complainant was a contractor, within the meaning of the statute, and we feel constrained to hold that, because of the omission to comply with this statute, it is not entitled to a lien for the work done under this contract.

A different state of facts exists as to the claim of the Van Bochove & Sons Manufacturing Company. The record shows that they were material men selling material manufactured in their own shops, and not contráctors or subcontractors. Sterner v. Haas, supra. The lien of the Van Bochove & Sons Manufacturing Company is valid.

The claim of defendant mortgagees to priority over the lien of the Van Bochove & Sons Manufacturing Company is answered against the contention of defendants’ counsel by the case of Kay v. Towsley, 113 Mich. 281 (71 N. W. 490).

Decree will be modified to conform to the views herein expressed. Appellants will recover costs of this court.

The other Justices concurred.