author: McGrath, C. J. Grant, J.

text:
    SUTLIFF v. DAYTON.

    Sale — Specific Performance — Fraudulent Appraisal of Goods.
    Complainant agreed to sell a stock of goods to defendant, and take in payment certain real estate at specified prices. The - goods were to be invoiced at cost, as shown by the bills, except such as were damaged or shopworn. Each party selected an appraiser. Complainant and his clerks assisted in making the inventory, and the quantity of the goods was determined by them. The invoices were not produced, but complainant represented that the cost price was attached to each article, and the inventory was made upon that basis. Shortly after taking possession of the stock, and before a final settlement, defendant became dissatisfied, and demanded a new appraisal, which was refused. Defendant thereupon had the stock reappraised by three experienced, disinterested persons, having first notified complainant to be present and produce his bills, with which request complainant did not comply. This appraisal was based upon an estimate of the cost of the goods, except as to those damaged, which were invoiced at their present value; and the total valuation of the stock was shown to be much less than by the former inventory. In a suit for specific performance, it appearing that complainant had raised the cost mark on the goods, altered and arranged them so as to conceal damage and shop wear, and misrepresented the quantity to the appraisers, it was held that defendant was not concluded by the original inventory, but should be charged with the amount of the second appraisal only. Grant, J., dissenting.
    Appeal from Ingham; Person, J.
    Submitted April 17, 1895.
    Decided July 9, 1895.
    Bill by Charles H. Sutliff aganst George M. Dayton for the specific performance of a contract. Defendant appeals.
    Decree modified.

      S. L. Kilbourne, for complainant.

      2L V. Montgomery, for defendant.

       Rehearing denied December 30, 1895.

   McGrath, C. J.

This is a bill to compel the specific-performance of a contract dated December 21, 1892, whereby complainant agreed to sell to defendant two stocks of merchandise, one located at Lansing and the other at Mt. Pleasant, consisting of millinery and ladies’ and gents’ furnishing goods. It was provided that all goods should be invoiced “at the actual cost, as shown by bills, except such as are damaged or shopworn; all untrimmed hats at $1.50 per dozen, and the trimmed hats at one-half the retail price; the furniture at prices as agreed upon verbally between the parties.” It was further agreed that complainant was to take in payment two houses and lots, one at $0,500 and the other at $0,000; and that, “if said stocks shall invoice over the amount of the two terraces as above written, he shall take as payment for said amount, over -the $12,500, any real-estate property belonging to said Dayton, at his list price.”

Complainant selected one Brisbin, and defendant one Watrous, to inventory the stocks. Watrous knew very little about the millinery business. Complainant, his wife, son, and clerks, assisted in making tlie inventory, which was completed about January 4, 1893. The inventory of the stock at Lansing amounted to $18,409.98, and that of the Mt. Pleasant stock to $3,125.37, making a total of $21,535.35. Pending the inventory, defendant conveyed to complainant the houses and lots specifically referred to in the contract, and, upon the completion of the inventory, defendant took possession of the stocks of goods. Shortly thereafter, and before anything further was done respecting a final settlement under the contract, defendant became dissatisfied with the inventory, and, in writing, demanded a new appraisal. Complainant did not respond.

On January 30, 1893, defendant wrote to complainant as follows:

“I wrote you I should insist on a new invoice. Unless you call to-day, and make some arrangement in regard to it, I shall get competent parties, and proceed at once to take invoice.”

Again, on February 3, 1893, defendant wrote as follows:

“Since the inventory, or pretended inventory, * * * I have found many discrepancies between the inventory and measurements and cost; so many as to make it certain that there have been either serious mistakes made, or fraud practiced upon me. The difference between the value of the goods upon the basis which they were to be valued by our contract, and the aggregate of the inventtory value by this pretended inventory, is, in my judgment, very large. I propose to employ disinterested and thoroughly competent men to take a correct inventory of these stocks at an early date. I much desire to avoid litigation with you, and invite you to be present at and participate in such inventory. A correct account of sales has been kept, so that no trouble need be anticipated in making an absolutely correct statement. Will you kindly indicate whether or not you will join in or be present at such an inventory, and, if so, at what early date it would best suit your convenience to have the inventory commence?”

On February 13, 1893, defendant wrote again:

“To-morrow (Tuesday) morning, at 10 o’clock, I shall be ready to proceed with the invoice mentioned and proposed by me in my last communication to you. I hereby request you to be present personally, or by some representative, to witness or participate in it, as you may elect. Please produce all bills which you may have on hand, so that we may use them on said invoice.”

Complainant made no response to any of these communications. Defendant then selected three appraisers from the city of Jackson, — one who had been in the millinery business for 12 years, another who had been in that business since 1856, and the third had been in the dry-goods business for 18 years. The inventory made by these gentlemen of the Lansing stock footed up $11,128.71, and of the Mt. Pleasant stock $2,269.52, making a total of $13,398.23, and the sales in the meantime amounted to $336.92, making a grand total of $13,735.15. These gentlemen did not inventory the goods at their estimate of present value, nor at the cost as marked upon the goods, but they testified that they knew what such goods cost, and inventoried them at cost, except as to damaged goods, and, as to those, they appraised them at present values.

It is insisted by complainant that, each party having selected a representative to take the inventory, both are concluded by the inventory so taken. The contract, however, provided that the goods were to be taken at the actual cost, as shown by the bills, except such as were damaged or shopworn; the untrimmed hats at $1.50 per dozen, and the trimmed hats at one-half the retail price. It is conceded that neither Brisbin nor Watrous saw or referred to the invoices, but complainant represented that each article had upon it the cost mark in characters. Brisbin and Watrous were given the key to the cost mark, and, relying upon the marks, affixed the prices. It also appears that neither Brisbin nor Watrous determined the quantities, but the measurements and counting were done by complainant and Ms clerks, and Brisbin and YVat.rous relied upon the figures given as to quantity. Next, in determining whether goods were damaged or shopworn, Brisbin and Watrous relied upon the general appearance of goods as presented to them in the web or roll. The testimony tends to show that certain of the goods in both stocks had no cost mark upon them when the contract was made; complainant says not over 5 per cent, of the articles. These goods, at least, were marked subsequently, at the instance of complainant. As to certain articles, it is conclusively shown that they were marked at figures largely in excess of the cost or the selling price. It is undisputed that, pending this inventory, complainant, his wife, his son, and a daughter, together with a force of clerks, were at work in both stocks of goods, preparing them for this inventory, marking such as were not marked, measuring velvets, silks, laces, ribbons, etc., counting ornaments and other things, cutting off damaged or shopworn ends of goods, rewinding ribbons, etc., and that the employés had been instructed by complainant to cut off the damaged or soiled or shopworn parts or ends of ribbons, silks, and other goods, and, in rewinding the ribbons, to wind the outside in, which was done. It further appears that a. letter was written by complainant to his daughter at Mt.. Pleasant, telling her, among other things, to mark certain pattern hats (the highest retail price of which was. $7.50, and which the clerks had been instructed to sell for .$5 rather than lose a sale) up to $10, and they were so marked, and charged up to the defendant at $5 each, or one-half of the figure so put upon them. Testimony was. offered clearly tending to show that the marks upon other goods had been erased, and raised cost and retail prices had been put upon them, which were made the basis for the inventory; that the cost price of plumes had been raised from $2.50 per dozen to $6; that retail prices on hats were raised from $6.25 to $7.50, from $2.50 to $4, and from $8.50 to $5; that in one instance, while Bris-. bin and Watrous were in one part of the store, engaged with the inventory, complainant and a clerk were in the show room in the silk department, at the other end of the store, putting the “cost mark” upon silks, and complainant told the clerk not to say anything about the marking, or, if he saw any marking done, not to mention it; that the party who had charge of the hat trimming department kept a book in which, as each hat was trimmed, she entered the cost, and gave to each a number, and pasted into the hat a corresponding number, and that, pending the inventory, the numbers in the hats were removed; that extensions were made upon the book in which the inventory was made, during its progress, by complainant, in the absence of both Brisbin and Watrous ; that a shortage was afterwards found in the measurements of 75 pieces of velvet; and that, in one instance, three yards and three-quarters had been cut from a bolt of expensive velvet, and the end had been sewed to the bolt, as though it had been untouched; and it was shown that during the inventory this piece of velvet had been taken from the store to complainant’s house, and returned. It is admitted by complainant that he burned up his books of account and his invoices, and that, but for such destruction, he could have produced the bills of all the goods in stock. He claims that the burning was done after the completion of the inventory, but he is contradicted in this, for Brisbin testified that he was informed by complainant, several days before the completion of the inventory, that the bills and books had been destroyed. Complainant denies that he wrote to his daughter to mark up the hats, but they were actually marked up, and two or three of his own clerks testify to the receipt of such a letter.

The following questions, put to complainant on cross-examination, and the answers thereto, need no comment:

“Q. Did you not yourself, for the express purpose of imposing upon Mr. Dayton, change the marks on goods after you made this contract, and mark them above the original cost?
“Á. Not that I know of.
“Q. You would be likely to forget such a circumstance?
“A. Well, I think I would.”

It would seem unnecessary to comment upon the facts here presented. Defendant would undoubtedly be bound by the valuation placed upon these stocks of goods, in the absence of testimony throwing discredit upon cost price, quantity, and character of the goods. The cost of such goods as were to be taken at cost was to be ascertained from the bills. The bills were not produced, but were destroyed. Complainant represented that the goods contained the cost mark. The gentlemen selected to make the inventory relied upon complainant’s representations, both as to cost and quantity. They further relied upon the appearance of the goods as presented to them in the course of the inventory. Defendant is not concluded because of what these gentlemen did in reliance upon the representations made to. them by complainant, when it appears that misrepresentations and deceit were used by him; no more so than if he had procured and presented to them bills which misrepresented the cost of the goods. If is not the errors in judgment of the appraisers that defendant complains of, but the active misrepresentations made by complainant.

The defendant agreed to take these goods as they then stood, the shopworn and damaged goods at the estimate of value placed upon them in their then condition. It could not have been contemplated either that certain of the goods were to be trimmed down, or that their shopworn or damaged character was to be concealed. A large portion of such a stock of goods ordinarily consists of articles which are not regarded as staple. The value of goods depends upon their salability. Goods often become shopworn because they have met with a tardy sale. That portion of a web or bolt of goods which has been exposed, and becomes shopworn in consequence, is an index as to age, and to the character as to salability of the whole piece. Deception seems to have been practiced not only as to the cost and retail price, but as to quantity and quality as well. Under such circumstances, defendant is not concluded by the inventory. Enough was shown to discredit that inventory. Defendant, as soon as he learned of the deception, demanded an inventory in accordance with the contract. He finally demanded the invoices, so that an inventory might be made upon the contract basis. Complainant refused to furnish them. Defendant then procured an appraisal to be made of the stock. The appraisers, so far as was possible, based their figures, as to goods not damaged or shopworn, upon the cost when purchased. As to damaged or shopworn goods, we have the judgment of three disinterested and competent parties. It is insisted by complainant that, at the hearing, he had, in a number of instances, procured duplicate bills, and submitted them, but no attempt at comparison appears in the record. Complainant took the position there that is taken here, that the inventory as first made concluded the defendant.

Complainant is entitled to be credited with the value as fixed by the last appraisal, adding the amount of sales made in the meantime, and should be charged with the value of the property conveyed to him at prices agreed upon. Defendant should be charged with the amount of said appraisal and the sales aforesaid, and have credit for the agreed value of the real estate conveyed. Complainant will have a decree for the difference, the same to be satisfied in the manner provided for in the contract. Defendant will be entitled to the costs of this court. A decree will be entered accordingly.

Long, Montgomery, and Hooker, JJ., concurred with McGrath, C. <L

Grant, J.

(dissenting). For about 12 years prior to 1893, complainant had been engaged in a wholesale and retail millinery business in the city of Lansing. Defendant was a speculator and dealer in real estate, and was the owner of several houses in the city of Lansing; had also been engaged in merchandising in a store directly opposite that of complainant; and had bought and sold many stocks of goods, consisting of clothing, hardware, and drugs. Negotiations were entered into between them for the exchange of the millinery stock for certain real estate of the defendant. Defendant, desiring to make the trade, made the following written proposition to the complainant:

“Three east terraces, for $18,500, finished according to contract. Will take both stocks of goods as agreed upon. If any difference coming to me, will take mortgage back on two east terraces. Or will trade two west terraces for $12,500, and, if stocks come to more than terraces,will pay in wild lands at my list price. Or will trade 200 acre farm, at $62.50 per acre, and one terrace, for stocks, or northern lands for difference on stocks and farm.”

This proposition was not accepted, but was followed by a written agreement, dated December 21, 1802, as follows:

“The said Charles H. Sutliff, party of the first part, agrees to sell to George M. Dayton his stock of merchandise situated at store No. 222, Washington avenue north, Lansing, Michigan, and his stock of merchandise at Mt. Pleasant, Michigan. Said stocks consist of millinery and ladies’ and gents’ furnishing goods and store fixtures. Said goods are to be invoiced in the following manner: All goods at the actual cost, as shown by bills, except such as are damaged or shopworn; all untrimmed hats at $1.50 per dozen, and the trimmed hats at one-half the retail price; the furniture at prices as agreed upon verbally between the parties. The said first party also agrees to take as payment the following property: The terrace on the corner of Shiawassee and Seymour streets at $6,500, and the terrace adjoining on the east at $6,000. Said buildings are to be completed according to contracts now made by said Dayton. The said first party also agrees that, if said stocks shall invoice over the amount of the two terraces as above written, he shall take as payment for said amount, over the $1.2,500, any real-estate property belonging to said Dayton, at Ms list price. The said George M. Dayton agrees to buy said stocks, and to pay for them- as agreed upon and in the manner aforesaid, and to give a full warranty deed for said terraces upon the fulfillment of said first party, as agreed by Mm to be done. It is also agreed between the parties that said invoice shall begin on the 22d day of December next, and completéd as soon as possible; also, that the damaged or shopworn goods are to be invoiced at actual value when invoiced.”

On the same day the two terraces were conveyed by deed to complainant. An invoice was immediately taken pursuant to this agreement; the defendant choosing a Mr. Watrous to act for him, and the complainant a Mr. Brisbin. The defendant was present, more or less, every day during the taking of the invoice, although he trusted it mainly to Mr. Watrous. Mr. Watrous had been employed on previous occasions by him to fix the value of other stocks of goods which he had purchased. He testified that he relied upon his judgment to fix the value of the goods now in controversy. The testimony on the part of the complainant showed that his judgment was generally accepted in case of a dispute. They were assisted by the clerks in the store, and were occupied two weeks in making the invoice and appraisal. The invoice of the Lansing stock amounted to $18,109.98; that of the Mt. Pleasant stock to $3,125.37.

After the invoice was completed, and on January 9, 1893, they executed the following supplemental contract:

“Balance of property to be taken by O. H. Sutliff on goods: He is to take two terraces, out of the three east ones, of the west five; the inside ones at $6,000 each, and the end one for $6,500. They are to be finished as per contract given. Sutliff is to give Dayton mortgage of $2,000 on each terrace, payable in three years, interest at 7 per cent, semi-annually. If goods should amount to more than terraces, Sutliff is to take real estate at list price.”

The stocks were immediately delivered to Mr. Dayton, who took possession, transferred the Mt. Pleasant stock to Lansing, and commenced selling. He, in fact, took possession of the store and the goods at Lansing upon the execution of the first contract.

February 3, 1893, he wrote complainant the following letter:

“Since the inventory, or pretended inventory, of the two stocks of merchandise which I,.on the 21st of December, contracted to purchase of you, the one at Ho. 222, Washington avenue north, Lansing, Michigan, and the other stock at Mt. Pleasant, Michigan, I have found many discrepancies between the inventory and measurements, and cost; so many as to make it certain that there have been either serious mistakes made, or fraud practiced upon me. The difference between the value of the goods upon the basis which they were to be valued by our contract, and the aggregate of the inventory value by this pretended inventory, is, in my judgment, very large. I propose to employ disinterested" and thoroughly competent men to take a correct inventory of these stocks at an early date. I much desire to avoid litigation with you, and invite you to be present at and participate in such inventory. A correct account of sales has been kept, so that no trouble need be anticipated in making an absolutely correct statement. Will you kindly indicate whether or not you will join in or be present at such an inventory, and, if so, at what early date it would best suit your convenience to have the inventory commence?”

To this letter complainant paid no attention. February 13th he again wrote complainant:

“To-morrow (Tuesday) morning, at 10 o’clock, I shall be ready to proceed with the invoioementioned and proposed by me in my last communication to you. I hereby request you to be present personally, or by some representative, to witness or participate in it, as you may elect. Please produce all bills which you may have on hand, so-that we may use them on said invoice.”

To this no reply was made. Thereupon defendant procured three men from Jackson, who were engaged in the millinery business, to appraise the stock. These parties appraised the stock at $13,398.23. Defendant’s testimony showed that he had sold goods to the amount of only $336.92 during the period of six weeks prior to the appraisal made by the men from Jackson.

Upon the refusal of the defendant to carry out the contract upon the basis of the original appraisal and invoice, the complainant filed this bill to enforce the specific performance of the contract. The defendant answered, admitting the material allegations of the bill, except those relating to the value of the stock. The allegation of the answer on which the defense is based is that “the damaged and shopworn goods were invoiced largely above their actual value, and goods not damaged or shopworn at prices largely in excess of their actual cost,” and that the aggregate value was $13,398.23. Proofs were taken in open court, and decree entered for complainant.

It is not. claimed that any false representations were made by complainant as to the character or value of the stock. No fraud is alleged in the answer. The contract is clear and specific. The only thing left undetermined was the manner of arriving at the value of the damaged and shopworn goods. This, however, was supplied by the agreement choosing Mr. Brisbin on the part of the complainant, and Mr. Watrous on the part of the defendant, to take the inventory and make the appraisal. Their judgment was final, in the absence of fraud or mistake. They were furnished every opportunity for the examination of the goods, aided by the clerks who had been in Mr. Sutliff’s employ, and were familiar with them. The goods were accurately measured, and those invoiced as undamaged were inventoried at cost price, as required by the contract. No fraud is alleged or claimed in making this inventory. The learned counsel for the defendant •says in his brief: “In conclusion, I have only to suggest that happily this case can be disposed of justly and properly without imputing intentional fraud to anybody.” T-Ie further says in his brief: “One of three things must be true: First, quantities were exaggerated, and goods invoiced which were not present; or, second, undamaged goods were invoiced above cost; or, third, a large amount of goods which were, as matter of fact, damaged and shopworn, were invoiced as undamaged. Probably, all these things are true to a degree.”

There is no evidence to sustain either the first or second proposition. An attempt was made to show a shortage in the measurement of some velvets, of which there were about 75 pieces. Some time after defendant had been in possession, one of his clerks measured one piece of this velvet, and claimed that she found it 8f yards short. She then measured the rest of the velvets. Neither she nor defendant kept any account of the amount of the shortage. She testified that 8 out of every 10 pieces were short from a quarter of a yard to 4 yards. She also testified that a few pieces ran over a little. This is all the evidence of any shortage, although defendant had other goods measured. This testimony is too indefinite to justify a finding of shortage or any deduction in consequence thereof. When a party complaining has it in his power to give accurate figures, he cannot call upon a court for relief upon mere conjecture.

Neither is there any evidence that, undamaged goods were invoiced above cost. Mr. Sutliff was nearly blind, and did no marking himself. The testimony is conclusive that the cost marks were placed upon the tags attached to the goods. Furthermore, some original and duplicate bills of purchases were produced upon the hearing in the court below, and no claim is made that they do not correspond with the marks upon the tags.

It follows that the defense rests solely upon the question whether there was a mistake in invoicing damaged and shopworn goods as undamaged, and in placing-values upon them. It is evident that the parties making the first inventory and appraisal had better opportunities for making examination than did those making the second. The former were occupied 14 days, and saw the goods as they were measured. The latter were occupied only two days, and evidently had no opportunity to make a thorough and minute examination. They were shown the contract, and testified that they made their estimates as nearly as possible under the terms of the contract as they understood it. They paid no attention to the cost marks upon the tags, but were guided solely by their own recollection and judgment as to what the goods “ought to hare cost.” It requires no argument to show that this' was not in accordance with the contract. That was for the cost to Mr. ¡áutliff, not what other parties might have bought the same goods for, or what they believed they ought 'to have cost. The testimony on the part of the complainant was that about one-third of the goods was estimated as damaged or shopivorn. One of the defendant’s appraisers placed the amount of damaged goods at about the same. A few figures in this respect are instructive. The total of the first appraisal was $21,-535.35. Of course, the cost price would be in excess of this; but if we assume this to be the aggregate cost price, and deduct one-third for damaged goods, it would leave the amount of the undamaged goods to be taken by the contract to be $14,356, — almost $1.000 greater than the valuation placed upon the entire stock by the second appraisal.

Briefly stated, the situation is this: The parties agreed upon a sale at $21,535.35. The goods were delivered, and defendant went into possession, and carried on the business for six weeks. The defendant asks the court to deduct from this $7,800.20, upon the judgment of three men that the stock ivas worth less than the agreed price by that amount, and to substitute the judgment of these men for the judgment of those agreed upon by both parties, and this without any off er on the part of defendant to rescind the contract. The witnesses were before the court, which had therefore a better opportunity to judge of their candor and truthfulness, and to determine how much credence to repose in them, than we have. To justify a reversal of the case upon the facts under these circumstances, there must be a clear preponderance of evidence in favor of the appellant. This court has frequently so held. So, also, have other courts. Montgomery v. Pickering, 116 Mass. 230. Courts of equity cannot relieve from foolish and hard bargains. The contract proved must be enforced, and no relief can be granted except in cases of fraud or mistake.

The decree should be affirmed, with costs.


source: Caselaw Access Project

author: McGrath, C. J.

license: Public Domain

text:
    KALAMAZOO SPRING & AXLE CO. v. WINANS, PRATT & CO.
    1. Assignment nor Benefit on Creditors — Preferences—Validity on Mortgage,
    A mortgage given to secure a bona fide indebtedness is not invalid by reason of its proximity to a general assignment by the mortgagor for the benefit of creditors, where the mortgagee, at the time of taking the security, had no notice or knowledge that an assignment was contemplated. Such a transaction does not constitute an illegal preference within the meaning of the assignment law.

    3. Fraudulent Conveyances — Relationship,
    A conveyance by an insolvent debtor will not be presumed fraudulent because executed to a relative.
    3. Corporations — Execution on Chattel Mortgage.
    A chattel mortgage executed by the president and the secretary of a corporation, with the consent of all of the stockholders, is valid.
    Appeal from Kalamazoo; Buck, J.
    Submitted May 1, 1895.
    Decided July 9, 1895.
    Bill by the Kalamazoo Spring & Axle Co. and others against Winans, Pratt & Co. and others to set aside certain mortgages. From a decree dismissing the bill, complainants appeal.
    Affirmed.

      Boudeman & Adams (E. M. Irish, of counsel), for complainants.

      Howard & Roos, for defendant Winans, Pratt & Co.

      J. W. Osborn, for defendants First National Bank, Wagner, and Merrill.

      S. F. Master, for defendant A. J. Mills, assignee.

       For cases involving assignments with preferences, see note to National Bank of Oshkosh v. First National Bank of Ironwood, 100 Mich. 485.

   McGrath, C. J.

Winans, Pratt & Go., a corporation, on June 6, 1893, made an assignment to Alfred J. Mills. On June 5, 1893, it executed three chattel mortgages, one to the First National Bank of Kalamazoo, one to Jacob K. Wagner, and the third to David B. Merrill, and a real-estate mortgage to said bank. The chattel mortgage to the bank was given priority. Wagner was president of the bank; James W. Osborn was its vice president; and Merrill was a director. Wagner, Osborn, and one Kauffer were the discount committee of the bank. James W. Osborn and Alfred J. Mills were partners as Osborn & Mills, and attorneys for the bank. George H. Winans and Ida P. Winans, his wife, and Arthur L. Pratt and Elizabeth P. Pratt, his wife, were the stockholders in Winans, Pratt & Co. All were directors. Winans was president, and Pratt was secretary .and treasurer. Ida P. Winans was the daughter of Merrill, and Elizabeth P. Pratt was the daughter of Wagner. The corporation was formed in February, 1891.

This is a bill filed by unsecured creditors, having obtained leave of the court, to set aside the aforesaid mortgages, for the following reasons:

“First. Because Winans, Pratt & Co. was insolvent at the time these mortgages were given, and had been insolvent for some time before.
“Second. Because the First National Bank of Kalamazoo, Mich., knew the actual condition of Winans, Pratt & Co. Jacob K. Wagner, its president and manager, knew Winans, Pratt & Co. was perpetrating a fraud upon its creditors. The said Jacob K. Wagner was himself assisting Winans, Pratt & Co. in carrying out this fraud, and therefore the said Wagner cannot, nor can the First National Bank, represented by him, profit by the wrongful act of the said Wagner.
“Third. Because the meeting of the board of directors of Winans, Pratt & Co. held on the 3d day of June, 1893, at which meeting a resolution was passed by some of the directors authorizing the execution of the mortgages in question in this suit, was not properly and legally called and held, and notice of the meeting- was not served on all of the directors of the corporation, although all of said directors were then in the city of Kalamazoo. Only two of the directors were present at the meeting at which the resolution was passed, there being no- quorum present for the transaction of business; and the resolution was there passed by two of the directors, George H. Winans and Arthur L. Pratt; and after being passed by them, and entered on the record book of the corporation, the record of said meeting was subscribed by Mrs. Winans and Mrs. Pratt, at their respective homes. There was no meeting of the board of directors in which they all met together and determined to execute the mortgages in question. The officers of the corporation derived no legal right or authority, by said resolution or otherwise, to make, execute, and deliver in behalf of said corporation any of said mortgages.
“Fourth. Because the said chattel mortgages and the said real-estate mortgage are illegal preferences as against our assignment law, and were in fact made at substantially the same time as the assignment; that the transaction of making the mortgages and the-assignment was in fact a continuous transaction, and the making of all these instruments constituted but a single transaction, namely, an assignment with preferences; and also claim that the chattel mortgages were void because not legally authorized by the corporation.”

It is conceded that Winans, Pratt & Go., at the time the mortgages and assignment were executed, was actually insolvent, and had been for some time previous thereto.

The second proposition is not established by the proofs. Winans, Pratt & Co. had for years done its banking with the defendant bank. The bank held its individual paper amounting to several thousand dollars. It had also discounted its notes indorsed by Wagner and Merrill, and, in addition, had discounted the bills receivable of the corporation. Although some of the indebtedness, both to the bank and to Merrill and Wagner, was contingent, it is not disputed but that there was, at the time of the execution of the mortgages, a bona -fide indebtedness to each mortgagee equal to the amount of the mortgage to each person. In December, 1892, the corporation had executed to the bank a real-estate mortgage for $5,000. So far as appears, the bank relied upon the information furnished by the officers of the corporation as to its assets and liabilities. On June 3, 1893, Mr. Pratt came to the bank, and represented to Mr. Wagner that they had paper and other obligations maturing upon that day, and needed $1,000; that they expected some remittances, but must have the $1,000 on that day, and, if they had it, they could pull through. It is evident that the officers of the bank became alarmed. Osborn and Merrill were sent for, and a consultation was had, and the bank finally agreed that it would adiumce the $1,000, provided the bank was secured by mortgages for the entire indebtedness of the corporation, both actual and contingent, and provided that Wagner and Merrill were also secured. This was consented to by Winans, Pratt & Co. The $1,000 was advanced on that day, and on the same day it was cheeked out to pay existing obligations. Osborn repaired to his 'office, and requested his partner, Mr. Mills, to prepare the papers. Mr. Mills dictated the mortgages to the stenographer in the office, and the same were completed at about 5 o’clock of that day, but they were not executed until Monday, June 5th, on which date they were filed. On Monday, Winans, Pratt & Oo. received notice of the protest of certain customers’ notes amounting to $2,000 and upwards, which had been discounted at the defendant bank, and by the latter forwarded for collection. They became alarmed, and, in the afternoon of that day, consulted with Mr. Mills as to what was the best course to pursue, and the probable effect of the filing of the mortgages upon their credit. An assignment was talked of, and they were advised that it would be necessary to call a meeting of the directors to authorize such assignment. They, however, left the office without coming to any conclusion. A meeting of the directors was, however, held that evening, and the assignment authorized. On Tuesday morning, June 6th, they again went-to the office of Osborn & Mills, where the assignment was prepared by Mr. Mills, executed by the president and secretary of the corporation, and filed by Mr. Mills at noon of that day. The mortgages were filed at 11:40 p. m., June 5th.

It is urged that this is a circumstance showing a concerted action, and connecting the execution of the mortgages with the assignment. Mr. Osborn, however, says that he took charge of the mortgages after their execution; that he was very busy during the day; that, being mayor of the city and president of the council, he went to the council that evening; that the city clerk was clerk of the council; that, when he arrived at the council chamber, he told the clerk that he had some papers to file, and wished to be reminded of the fact at the adjournment of the council; that, immediately after the adjournment of the council, the papers were filed. Wagner, Merrill, and Osborn all testify positively that there was no talk concerning an assignment, and that they had no knowledge that an assignment was contemplated, until after the execution and delivery of the mortgages. Winans testified that the assignment was not contemplated or thought of until after the execution and delivery of the mortgages. Mills says that nothing was said about au assignment until Monday afternoon, after the execution and delivery of the mortgages, and that, so far as he knew, the assignment was not determined upon until Tuesday morning.

It is more than probable that the relationship between Winans and Pratt and Wagner and Merrill may have induced both Wagner and Merrill to extend a line of credit to the corporation beyond what they would have done in the absence of that relationship, and to place more reliance upon the representations made by the officers of the corporation as to its financial status than they otherwise would have done, and there is testimony tending to show fraudulent conduct on the part of the officers of the corporation with respect to the annual reports filed in January, 1892, and January, 1893; but the testimony does not warrant the inference that either Wagner or Merrill was a party to any scheme to defraud the creditors of the corporation. Fraud or guilty knowledge is not to be presumed from the mere fact of relationship.

It cannot be said upon this record that the execution of the mortgages and the assignment were one collusive transaction, so as to constitute the same an assignment with preferences. It has repeatedly been held that it is lawful for even a creditor who has knowledge of the intention of a debtor to make an assignment to attempt to secure his debt before the execution of the assignment, and the further knowledge on his part that such action will postpone or perhaps cut off the claims of' other creditors will not make a- mortgage taken as such security fraudulent, even though the creditor also knows that the debtor consents to give it because of an expectation on his part that it will shield him, so long as there is no collusive assistance rendered by the creditor with that object in view. Sheldon v. Mann, 85 Mich. 265; Warner v. Littlefield, 89 Mich. 329; National Bank of Oshkosh v. First National Bank of Ironwood, 100 Mich. 485; Austin v. First National Bank of Kalamazoo, Id. 613.

The chattel mortgages were executed by the president and secretary of the corporation, and with the knowledge and consent of all the stockholders. Eureka Iron & Steel Works v. Bresnahan, 60 Mich. 332.

The question of the validity of the assignment is not involved here.

The decree is affirmed, with costs to defendants.

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


author: Montgomery, J.

text:
    CRAWFORD v. SCHNEIDER.
    Building Contract — Specific Performance — Conveyance as Security.
    Complainant, being the owner of a land contract, entered into a written agreement with defendant’s assignor whereby the latter was to erect a building upon the premises for a specified sum, pay the balance of the purchase price to the vendor, take a conveyance from him, and convey to complainant upon repayment of these amounts. The land was deeded to the defendant, who executed a mortgage thereon pursuant to authority conferred by the agreement, and constructed a building which did not conform to the requirements of the contract, and could not be made to do so without the practical destruction of the building. Upon a bill setting forth the facts, and praying for specific performance and for general relief, the court decreed that defendant cause the mortgage to be discharged; that he remove the building from the premises, and restore them to their former condition; and that he deed the same to complainant upon repayment of the amount paid upon the land contract; or, instead, that he accept a compromise proposition tendered by complainant. Held:

    (1) That complainant could not be required to accept the building.
    (2) That the provision of the decree relative to the removal of the building was inserted for the benefit of defendant, and might be waived, and the building continue to be a part of the realty.

      (3) That, the enforcement of specific performance being impracticable, and the defendant manifesting no purpose of performing the contract according to its terms, the relief granted was proper, and was justified under the pleadings.
    Appeal from Wayne; Hosmer, J.
    Submitted May 2, 1895.
    Decided July 9, 1895.
    Bill by Sarah Crawford against Emanuel Schneider and others for specific performance of contract. From a decree for complainant, defendant Schneider appeals.
    Affirmed.

      Lemuel H. Foster, for complainant:
    Specific performance of a building contract will be enforced where there is no other adequate remedy. Dester v. Ross, 85 Mich. 370; Stuyvesant v. New York, 11 Paige, 414; Birchett v. Bolling, 5 Munf. 442; McCorkle v. Brown, 9 Smedes & M. 167; Voorhees v. DeMeyer, 2 Barb. 37; Shaw v. Livermore, 2 G . Greene, 338; Leicester Piano Co. v. Improvement Co., 5 C. C. A. 68.

      Moores & Goff, for appellant:
    Under a prayer for specific performance, the decree entered was unauthorized. Converse v. Blumrich, 14 Mich. 110; Hubbard v. Winsor, 15 Mich. 146; Payne v. Avery, 21 Mich. 524; Harwood v. Underwood, 28 Mich. 427; Rudd v. Rudd, 33 Mich. 101.
    A court of equity will not enter into the execution of construction contracts. Beck v. Allison, 56 N. Y. 366; Railway Co. v. Rust, 17 Fed. Rep. 275; Oregonian R. Co. v. Oregon R. & N. Co, 37 Fed. Rep. 733; Blanchard v. Railroad Co., 31 Mich. 43.
   Montgomery, J.

The complainant was the owner of a land contract made by one James S. Goodrich, covering a lot situated at the south-east corner of Seventh and Irving streets, in Detroit. After the purchase, she made improvements upon the lot and a dwelling house standing on the rear of the lot, facing on Trving street, so that the lot and improvements were worth $2,000 to $3,000; and there remained unpaid on the purchase price $784. On the 12th of November, 1892, she entered into a contract with George W. Myers, of Detroit, an architect and builder, whereby he agreed to erect on the front portion of the lot, fronting Seventh street, a doable frame house, built according to certain. plans and specifications, for the sum of $8,850, to be paid in monthly installments, beginning at the time when it was expected the house would be finished. It was agreed that Myers should pay off the $784, and take a deed from Goodrich of the premises, and give complainant a contract for the conveyance of the same to her upon payment of the contract price for the house and the amount paid on the contract. On the 15th of November, 1892, she entered into a contract with Myers whereby he agreed, for a consideration of $4,028, which was the contract price of the house and the balance due on the Goodrich contract, to be paid in monthly installments, according to the terms of the contract, to convey the premises to her. The contract contained a clause authorizing Myers to mortgage the premises. Myers did not build the house, but assigned the contract to defendant Emanuel Schneider, the appellant, and on December 21, 1892, the premises were conveyed to Schneider, who, in turn, mortgaged them for $2,500, Schneider undertaking the performance of the contract for the building of the house made between complainant and Myers.

There is no pretense that the house which was constructed corresponded in all respects to. the house provided for in the specifications and contract between complainant and Myers. On the contrary, the circuit judge found that the departures from the contract were so great, both in the quality and size of the timbers and materials used, and in the quality of the workmanship, that the house cannot be made to comply with the specifications without the practical destruction of the building. This finding is amply supported by the testimony. The joists throughout the house are two inches narrower than specified. The rafters are two by four instead of two by six. The roof, valleys, chimneys, attic partitions, and floors are not as specified. The siding, instead of being laid three and one-half inches to the weather, is laid four and one-half inches. It is very clear that, if the defendant Schneider were suing to recover upon this contract, he would not be able to maintain his action. That question is determined in Martus v. Houck, 39 Mich. 431. Nor do we think that a court of equity could compel the complainant to accept a house which she has not contracted for.

It is alleged that the decree which the court entered is not justified by the pleadings. The bill set out all the facts, and asked the court to undertake the specific performance of the contract. It also contained a prayer for general relief. The decree of the court provided that defendant Schneider should cause the mortgage to be canceled and discharged of record; that he should remove the house from the premises, and restore the premises to their former condition, within 60 days from the date of the decree; that an accounting should be taken of the unpaid balance of the purchase price of the premises, and of all sums expended for taxes, paving assessments, etc.; and that complainant should pay to Schneider this sum, upon his executing to her a deed of the premises. It also gave an option to defendant to retain the premises upon which the house is located, which will be hereinafter referred to. It is contended that there is no basis for that part of the decree requiring the removal of the house. The situation of the parties to this case is peculiar. If the complainant had had no previous title or ownership in the property, it might be that, when it is ascertained that the contract as contemplated cannot be specifically performed, the complainant might be left to her remedy at law to recover damages. But in this case it was not intended to vest title in either Myers or Schneider, except as trustees, and for the purpose of securing payment by complainant of the purchase price of the lot and the agreed price of the building, when completed according to the specifications. It now transpires that the contract is not possible of performance specifically, unless the court should go into the building business, and the defendant manifests no purpose of performing the contract according to its.terms. We think the court can, and should, protect' the rights of the complainant, by a decree that her interest in the property should not be diverted or clouded by defendant’s unwarranted claims; and we think, as the bill sets out all the facts, it is broad enough to admit of granting the relief in this case. It is perhaps true that the court should not have imposed the positive requirement that the defendant remove the building from the premises. This provision was undoubtedly inserted for the benefit of the defendant. He may waive it, if he choose, and the building may continue, as it is, a part of the realty; and the decree will be so framed in this court.

Complainant „ offered below, and still continues the offer, to accept a conveyance of the rear end of the lot, with her house upon it, and permit defendant to retain title to the front portion, in payment iof the amount remaining unpaid upon the original purchase price; and a provision was inserted in the decree giving to defendant the option to accept such proposition within 30 days from the date of the decree. The decree in this court will continue the same option. The causé will be remanded to the court below for further proceedings under the decree, if the same shall become necessary. Complainant will recover costs.

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


author: Hooker, J.

text:
    ALLEN v. MILWAUKEE MECHANICS’ INSURANCE CO.
    1. Fire Insurance — Forfeiture.
    There is no impediment to agreements for forfeitures in fire-insurance policies, if the parties choose to make them,
    2. Fire Insurance — Provision for Annual Inventory.
    Under a fire-insurance policy providing that it shall be void if the insured fail to take an inventory of stock at least once a year, the insured is entitled to a reasonable time after the issuance of the policy within which to make an inventory, if there is none in existence which satisfies the requirements of the policy.
    3. Fire Insurance — B’ailure to Render Proofs of Loss — Forfeiture of Policy.
    Where a fire-insurance policy provides that proofs of loss shall be furnished within 60 days after a fire, that the loss shall not become payable until 60 days after such proofs have been received, and that no action shall be sustainable until after compliance by the insured with the requirements of the policy, nor unless commenced within 12 months after the fire, the insured has at least 10 months within which to make his proofs of loss (Steele v. Insurance Co., 03 Mich. 81); but where he brings an action and permits the year to expire without furnishing such proofs, and the provision has not been waived by the insurer, there can be no recovery.
    4. Same — Estoppel of Company.
    Shortly after a loss under a fire-insurance policy, an adjuster of the company told the insured that everything was satisfactory as to the household furniture covered thereby, a list of which he had made at her dictation, but that he wanted her to obtain the bills of her store goods, after which, upon notification, he would meet her and make a settlement. The policy provided that the company should not be held to have waived any provision thereof by any requirement or proceeding on its part relating to any examination therein provided for. Held:

    (1) That there was no waiver of the formal proofs of loss required by'the terms of the policy.
    (2) That, at most, any waiver was conditioned upon the procuring of the bills, which the insured failed to do.
    (3) That, it further appearing that the insured was advised, several mmths before the expiration of the time within which proofs of loss might be furnished, that the company was insisting upon the stipulated proofs, and that no prejudice had resulted to her in the meantime, an estoppel could not be predicated upon the conduct of the adjuster, even though the insured could be said to have been misled thereby
    Error to St. Clair; Vance, J.
    Submitted May 8, 1895.
    Decided July 9, 1895.

      Assumpsit by Mary Allen against the Milwaukee Mechanics’ Insurance Company on a fire-insurance policy. From a judgment for plaintiff, defendant brings error..
    Reversed.

      A. O. Blodgett (Atkinson & Wolcott, of counsel), for ap pellant.

      M G. Babcock, for appellee.
   Hooker, J.

The defendant appeals from a judgment upon a policy of insurance. It seeks to avoid liability upon the technical claims that an inventory of plaintiff's goods was not kept outside of the burned building, or in an iron safe, and that proofs of loss were not furnished within the period stipulated in the policy.

Insurance contracts, like all others, are made by the parties, and cannot be changed by the courts. There is no impediment to agreements for forfeitures, if the parties choose to make them. This contract of insurance contains provisions which create a forfeiture if the insured has failed to comply with its terms, unless she can be relieved through the application of the doctrine of estoppel. She has consented to a provision that the policy shall be void if she fails to take an inventory of stock once a year, and to keep the last inventory in. an iron safe, or other secure place in a building other than the one containing the property insured. She has consented to a similar provision in case she fails"to furnish proofs of loss of a stipulated character within 60' days after the fire, the policy providing that “no action * * * shall be sustainable * * * until after full compliance,” etc., “nor unless commenced within 12 months next after the fire.”

The contract contains the further provision that—

“No officer, agent, or other representative of this company shall have power to waive any condition or provision of this policy, except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto; and, as to such provisions and conditions, no officer, agent, or representative shall have such power, or be deemed or held to have waived such provisions or conditions, unless such waiver, if any, shall be written upon or attached hereto.”

Also, the following:

“This company shall not be held to have waived any provision or condition of this policy, or any forfeiture thereof, by any requirement, act, or proceeding on its part relating to the appraisal, or to any examination herein provided for; and the loss shall not become payable until 60 days after the notice, ascertainment, estimate, and satisfactory proof of the loss herein required have been received by this company.”

It is admitted that no satisfactory proofs of loss have been received by the defendant, and that no written proofs of loss have been made and furnished by the plaintiff at any time.' The action was brought about seven months after the fire.- It is also admitted that she never took an inventory of stock after she bought the stock. Her policy was destroyed by the fire, which occurred soon after; her purchase being in February, the policy having been issued in April,-for one year, and the fire having occurred July 19, 1892.

No question was raised over the validity of this provision relating to the inventory. The circuit judge instructed the jury that it was his construction of that clause, “ that Mrs. Allen was not required between the time of issuing this policy on May 30th [i. e., April 30th] .and the time^ of the fire, on July 19th, to' make any inventory of this property, and that the failure to do it does not defeat her right to recover on this policy, if she is otherwise entitled to recover.” It was admitted upon the trial that this policy was a Michigan standard policy. It was issued for one year. Under this provision, the plaintiff should be allowed a reasonable time to make her inventory, if she did not have one, which may be infer-able from the statement that she took none after her purchase in February, although she began one that she did not finish. If she had an inventory taken when she purchased, she should have cared for it as provided in the policy, and in such case it would have been unnecessary to take another before the fire, as that would have been a compliance with the terms of her policy; If the testimony showed that she had an inventory, the judge may not have erred in saying that it was unnecessary for her to take another. If not, it should have been left to the jury to say whether a reasonable time had elapsed, if the court could not have determined that fact from the undisputed evidence.

It being shown that the plaintiff had not complied with the conditions of her policy by filing proofs of loss, it remains to consider the question of estoppel. This claim is based on negotiations with the defendant’s adjuster. She testified that he called upon her about a week after the fire. She stated what household furniture she lost, and he made a list until he said it was enough to cover the loss (i. e., $200), and that she need not give him more, and that as to the household furniture everything was satisfactory; that he wanted her to get bills, as far as possible, of her store goods; that she said she would as far as she could, but expected difficulty, as she usually paid cash. She testified, further, that he told her that, as soon as she notified him about getting things ready, he would meet her at Port Huron. She was to notify the local agents, and they him, and he would meet her at Port Huron and make a settlement. She did so, and they put her off from week to week, saying they expected the adjuster there every day to settle it. She went to all who sold her goods, and they told her that, as she always paid cash for goods, they could not furnish bills; and she made a list of the goods in the store at the time of the fire, as near as she could remember, and took it to the local agents, and said she had her bills as far as she could get them, and what bills she didn’t have she had proof for of the wholesale men where she bought them, and they told her that was all right, they expected the adjuster every day, and to keep the list until he came. She also caused one Atkins, of Port Huron, to'write the adjuster or the company, and he received a reply from the adjuster, dated August 8, 1892, stating that he would adjust Mrs. Allen’s loss as soon as she was ready to substantiate her claim in conformity with the conditions of her policy, and as soon as he should be informed to that effect he would go to Port Huron to give the matter his attention. One Jacob Stanzel testified that he was present at the interview with the adjuster at her request; that the adjuster made a list of furniture, and said she need not give any more, — that it was enough to cover the loss, — that was all right; and that he afterwards said she would have to get bills of the goods as soon as she could, and she was to send or take the bills to the-local agents, and they would write him, and he would send back word when they would come and settle. He also testified to the talk between her and the local agents. He said: “I heard them tell her that they had not heard from the adjuster, but they expected to hear every day or two, and they would write her just as soon as they heard, and she was to come down and settle the loss.”

It is unnecessary to refer to the contradictory testimony offered by the defense. We find it unnecessary to discuss the question of the adjuster’s authority to waive the proofs of loss, because this testimony fails to show a waiver, if Ms authority were conceded. He left Mrs. Allen with the statement that she had better get those bills, and then he would see her again. He might have insisted on his proofs of loss then and there; but, whether he did or not, he might legitimately make other investigations, especially when it was developed that she had no inventory, or other means, beyond her mere recollection, of giving him eiddence of the quantity and value of the goods destroyed. It may be that he was willing to consider and submit to his company the propriety of paying the loss, notwithstanding her failure to properly care for an inventory, without trying the question whether her failure to make the inventory at once or to file an existing one was a breach of the contract. Whatever Ms motive was, it does not import an intention to give her to understand that she need not make proofs of loss, and bind his company to accept any list that she might prepare. At the furthest, it was conditioned upon her getting bills, which she says that she did not get. Furthermore, under the decision in the case of Steele v. Insurance Co., 93 Mich. 81, she had at least ten months within which to make her proofs of loss. Within less than four weeks after the fire, the letter to Atkins, which was given to her. apprised her-that this company was insisting upon proofs of loss, and she became sufficiently convinced of it to bring an action several months before the time within which she might furnish them expired. She was not misled for any length of time, if it can be said that the adjuster misled her, nor was she misled to her injury. She lost no right, -was put in no worse position, suffered no injury, by reason of Ms promise to see her again when she obtained the bills. The alleged estoppel in this case must be tested by the rules applicable to estoppel, and we find the case wanting in its essential elements.

It is unnecessary to discuss the case further. Inasmuch as she brought her action and allowed a year to expire without furnishing any proofs of loss, there can be no recovery, and we have no alternative but to reverse the judgment. No new trial will be ordered.

The other Justices concurred.


text:
    BURT v. LONG.
    1. Record on Appeal — Frivolous Assignments op Error.
    The practice of needlessly multiplying assignments of error is subject to criticism.
    2. Lost Letter — Secondary Evidence,
    Where a witness testifies that he has- not seen a certain letter since its receipt by him some 12 years previous, that his papers were afterwards destroyed by fire, except a few that he kept in a specified place, that he has searched for papers among those last mentioned, and that the one in question was not there, a sufficient foundation is laid for the introduction of parol evidence of the contents of the letter, although the witness further states that he has not made a search for that particular paper.
    3. Cross-examination — Discretion op Trial Court.
    The action of the trial court in limiting the extent of the cross-examination upon an unimportant matter, on the ground that too much time was being occupied thereby, will not call for a reversal.
    4. Impeachment — Contents op Letter — Harmless Error.
    An impeaching question regarding the contents of a letter written by the witness is properly excluded where the letter is in the possession of counsel propounding the question, and has not been submitted to the witness for inspection; nor can the rejection of such a question be said to have been prejudicial where the letter was subsequently produced, and shown to contain no such statements as imputed by counsel.

      5. Witnesses — Animus—Cumulative Testimony.
    The exclusion of a letter admissible only for the purpose of showing the animus of a witness is not prejudicial error where his hostility is already apparent from his testimony.
    8. Evidence — Existence of Claim.
    The fact that a letter, while stating that the writer is “ hard up," makes no claim against the person to whom addressed, has no tendency to show that such person was not indebted to the writer, and it is properly excluded when offered for that purpose.
    V. Trial — Exclusion of Question — Remedy.
    Error will not lie on the exclusion-of a question as leading, where it is apparent that counsel could have elicited the facts desired by changing the form, of the question.
    8. Instructions to Jury — Admitted Fact.
    In instructing the jury, the court may properly assume a fact as admitted where it has been treated as such throughout the trial.
    9. Evidence — Contents of Letter — Competency of Witness.
    One at who3e direction a letter was written by another, and who read it after it was written, is competent to testify as to its contents.
    10. Evidence — Admissions—Remoteness.
    Evidence of statements expressive of a desire to adopt a child not then born is so remote as to be inadmissible upon the question of the existence of a contract claimed to have been made several months thereafter, whereby the person making such statements was to be compensated for the care of the child.
    11. Contract for Support of Child — Effect of Attempted Adoption.
    In an action upon an express contract for services rendered in the care of a child, evidence that insufficient articles of adoption or apprenticeship were made to plaintiff's wife is admissible only as bearing upon the probability of the execution of the contract sued upon, and' of plaintiff’s reliance thereon.
    12. Rejection of Testimony — Curing Error.
    Any error committed in rejecting testimony upon a branch of the case is cured where counsel are subsequently, afforded ample opportunity to inquire into the subject.
    13. 'Evidence — Motives of Witness.
    A witness is properly permitted to explain his reasons for his acts in connection with the transaction to which he testifies, where otherwise the existence of a motive might be inferred unfavorable to the contention of the party calling him.
    14. Evidence — Cross-examination—Animus oe Witness.
    A party to a suit who has drawn out the fact that the opposite party has been arrested for a criminal offense may be asked on cross-examination, as bearing on the question of animus, if he did not instigate the making of the complaint upon which the arrest was founded.
    Error to Ionia; Davis, J.
    Submitted June 14, 1895.
    Decided July 9, 1895.

      Assumpsit by Lucius C. Burt against Edward Long to recover for the support of defendant’s daughter and her child. From a judgment for the plaintiff, defendant brings error.
    Affirmed.

      Mains & Mains (Miller & Clute, of counsel), for appellant.

      W. N. Howard and McGarry & Nichols (M. A. Nichols, of counsel), for appellee.
   Montgomery, J.

Plaintiff brought this action to recover compensation for the board of the bastard child of defendant’s daughter from June 15, 1883, to June 15,, 1894, and for board an'd care of defendant’s daughter, the mother of the child, for seven months, and for care and nursing during confinement, and for cash paid midwife., plaintiff claims that defendant’s wife brought the daughter to plaintiff’s house, at Carrollton, near Saginaw, from Ionia county, and told him that defendant sent her witli the request that plaintiff care for her, and said he would pay well for it, and that the defendant sent a note by his wife, stating the same thing. Plaintiff claimed that, after the child was some six months old, he took the mother and child home to defendant, and that he (defendant) then requested the plaintiff to take the child back to his (plaintiff’s) home, and promised that he (defendant) would pay well for it. Defendant denied any such agreement to pay, and claimed that plaintiff’s wife adopted the child. These were the issues tried before the jury. A verdict of $1,300 was awarded, and defendant brings error.

The record contains an even 100 assignments of error. We think it proper to call attention to the practice resorted to in this case. It is reasonably safe to say that no one connected with this case on either side entertains the opinion that on the trial of these simple issues the learned circuit judge committed 100 distinct errors. It ought to be clear to counsel for defendant that there was no such number of even doubtful rulings. In the present-case the questions which could legitimately arise were whether, if the plaintiff proved the promise alleged and the services, he was entitled to recover; and this is not doubtful. And, secondly, did the court observe the rule that the evidence must be confined to the point at issue between the parties, and the rule that the best evidence of which the nature of the case admits must be adduced? And, thirdly, did the court fairly submit the issues involved to the jury for determination on the facts?

1. Plaintiff testified that, when defendant’s wife brought the daughter of defendant to Carrollton, she brought a note from defendant, 'reading in substance: “Burt, keep this child, if possible; and I will pay you well for it, and my wife will tell you the rest.” The first four assignments of error discussed relate to the alleged error in receiving parol testimony of the contents of this note. It is urged that the proper foundation was not laid by showing Search for the letter. The trial took place in 1895, and the paper is claimed to have been received by the plaintiff in 1883. Plaintiff testified on direct examination that the paper was lost. On cross-examination he testified:

“I haven’t noticed it since we came out here. I don’t remember how long we kept it. I didn’t pay any attention to it. It might have been there for a month or two after she came out there. I remember reading it or seeing it. I don’t know what became of it; I just read it and laid it down, and I.have not seen it from that time until now, and I haven’t searched for it at all. The most of my papers were burned up. My house burned up in 1890. I had a place where I kept my papers. I saved some of them. My deeds, and such as that, I kept in my satchel in my bedroom; but papers that I didn’t pay much attention to were burned up. I saved my papers that were in my bedroom in my satchel. This paper was not in my satchel among the papers. I looked it through, and did not find it.”

He further testified that he had never made a distinct search for that one paper, but that he had searched through the satchel for papers.

We think the testimony was sufficient to admit proof of the contents. It appears from it that the papers, outside of a few kept in the valise, were burned. If all the papers in the house had been burned, there could be no doubt that the loss was sufficiently shown. If, in addition to the fact that all the papers in the house except those in the satchel were burned, plaintiff knew from familiarity with the papers that no such paper was among them, this sufficiently showed loss. The fact that he did not make search for that particular paper in the valise, if it was never the receptacle for the paper, does not show a want of due effort. The cases cited by defendant’s counsel are clearly distinguishable. In Darrow v. Pierce, 91 Mich. 66, the witness had placed the paper in the hands of a third person, and showed no inquiry of him, or effort to secure it of him. In Angell v. Loomis, 97 Mich. 5, witness did not testify where he had searched for the paper, and there was nothing in the case tending to show its destruction. In Greenleaf on Evidence (volume 1, § 558) it is said:

“What degree of diligence in the search is necessary it is not easy to define, as each case depends much on its peculiar circumstances. * * * But it seems that, in general, the party is expected to show that he has in good faith exhausted, in a reasonable degree, all the sources of information and means of discovery which the nature of the case would naturally suggest, and which were accessible to him. It should be recollected that the object of the proof is merely to establish a reasonable presumption of the loss of the instrument, and that this is a preliminary inquiry addressed to the discretion of the judge. If the paper was supposed to be of little value, or is ancient, a less degree of diligence will be demanded, as it will be aided by the presumption of loss which these circumstances afford.”

2. The next assignment discussed relates to the exclusion of a question on the cross-examination of plaintiff. He testified to the fact of a quarrel between himself and defendant in front of plaintiff’s house. He said:

“My wife could hear him talk. Sometimes I raised my voice a little bit. I think a little bit louder than I am talking now.”
Q. “How loud? So they could hear you four rods?”
A. “They could hear me across the room, anyway.”
The court interposed: “I don’t see how you are going to come in here and raise an issue in this way. You are spending a good deal of time over that.”
Mr. Miller: “He has testified he thought his wife could hear the conversation.”
The Court: “There are but one or two issues in this case, and you will have to rely upon the statements of witnesses in some cases. We might raise a dozen or fifteen issues, but you can’t follow them all out. It appears they did have trouble. That can be met. All the detail it don’t seem necessary to go into.”
Mr. Miller: “Does your honor rule the question out?”
The Court: “I think you are spending too much time, over the question.”

It will be noticed that the court did not strike out the testimony. It was not of much importance, and it may have seemed to the court that too much time was being spent on the question. We see no reason to doubt the accuracy of his judgment. No error was committed.

3. Mrs. Burt, plaintiff’s wife, on cross-examination, had testified: “I never wrote a letter to my sister, Mrs. Crandall, in which I said that we were going to fight, and that unless she came down and stayed by us, and went for a row, we would never get a cent.” She was then asked: “Did you ever write them to the effect that you were going after him now, and try and get your share of the property, for you couldn’t get it in any other way?” The question was excluded. It does not appear just what objections were urged, but it does appear that, from the facts within the knowledge of the court, enough good ones existed. In the first place, this testimony was only competent as laying the foundation for an impeachment of the witness, and no time, place, or circumstance was fixed. Furthermore, it was known to the court that the letter to which this inquiry referred was there, in possession of defendant’s counsel, and fairness to the court as well as to the witness required that it should be submitted to the witness for inspection. In fact, the letter had already been identified by the witness. Furthermore, the witness had substantially covered the subject by her testimony. And, lastly, the letter itself, after-wards produced, shows on its face that it contains no such statement as the counsel implies in the question propounded.

4. Assignments of error 32 and 33 relate to the exclusion of the letter. This letter was excluded for the reason that it did not tend to contradict the witness on material points. The only purpose for which it could fairly be suggested that it could be used was to show generally the animus of the witness. But it had already appeared that she was an adverse witness. She was the wife of the plaintiif, and had already shown on the witness stand that s'he was an enemy of her father. The letter could not have made this more clear. The only other matter contained in the letter was an assertion of enmity to or distrust of her brothers and sisters, and an avowal that she would not be beaten out of her share of the estate. This in no way contradicted her on material questions. -The ruling excluding it was not error. Exhibit G- (another letter written by this witness) was in the same line, and properly excluded.

Defendant'also offered in evidence a letter from plaintiff to defendant, in which he wrote about being hard up, but did not dun the defendant. We do not think this had any tendency to support the defense.

5. When defendant was on the stand, and while testifying in reference to the occasion when his wife went with the girl Phoebe to Carrollton, he was asked: “Did you, in that conversation, tell your wife or advise your wife to take your daughter to Saginaw?” This question was objected to as leading, and excluded. Whether the question was strictly leading or not, the circuit judge has some discretion in shaping the course of a trial, and the ruling excluding the question did not injure the defendant, as he could still have put a question which would elicit the facts. See Fraser v. Jennison, 42 Mich. 206. Indeed, it appears that defendant fully testified on the subject.

In the same connection, it is urged that error was committed in charging the jury as follows:

“In determining whether such a contract was made, you are to take into consideration the situation of the parties at the time, what was said by them, if anything, the letters that have been offered in evidence in the case, and all of the evidence given here on the trial, the condition of the girl, the fact as to who was the father of the child, the admitted fact that defendant had his wife take her to Burt’s.”

It is said that it was not an admitted fact that defendant had his wife take the girl to Burt’s, but that he testified that he objected. But we are convinced that, whatever he may have said in the first instance to his wife upon the subject, it is beyond dispute, and was treated on the trial as an admitted fact, that he did send Ms wife to Saginaw with the girl.

6. The next assignment of error relates to the rulings of the court by which plaintiff was permitted to testify that his wife wrote to defendant by his (plaintiff’s) direction, stating that he wanted something more than a mere verbal contract that he was to be paid for keeping the child. The defendant admitted having received a letter at this time, but denied that its contents were as claimed by the plaintiff, and the question was as to its contents. If the plaintiff knew what its contents were, and he swore he did, he was a competent witness. It is urged that his testimony was incompetent because it occurred in the absence of defendant; but the court excluded the conversation, except only the fact that plaintiff gave direction to his wife to write a letter. This was a part of the res gestee. The contents of the letter were sworn to, not from these instructions, but from having read it. Defendant’s counsel, in their brief, state:

“If plaintiff had seen the letter written, and known its contents, it would be admissible; but telling his wife what to write, and not knowing whether she wrote what he told her or not, would clearly be incompetent.”

We agree with, this, but counsel will discover by a casual reading of the record that that is precisely what was done in this case. Plaintiff testified that he did read the letter, and did not testify what he instructed his wife to write.

Q. “What instructions did you give her?”
The Ce>urt: “I think you had better show what was written.”
Q. “Do you know what was written?”
A. “Yes, sir; I told her to write.”
Mr. Miller: “I object to what you told her.”
Q. “What was written? Did you see the letter?”
A. “Yes, sir; in regards to keeping the child?”
Q. “Yes.”
A. “That I wanted something more than a verbal contract to show that I was going to get paid for keeping the child.”

7. Defendant sought in various ways to show that plaintiff had contemplated adopting the child, and that plaintiff’s wife did adopt it, and a large number of assignments of error relate to the rulings of the court upon these questions. Some of the assignments predicate error on the exclusion of alleged statements made by the plaintiff before the birth of the child, expressing a wish of plaintiff to adopt the child. We think this testimony was too remote. It preceded by some months the time when the plaintiff took the child and its mother to defendant’s house, and the occasion when, according to plaintiff’s theory, the agreement for the future care of the child was made.

The defendant offered testimony tending to show that plaintiff had adopted this child, or that it had been apprenticed to plaintiff’s wife. Upon this subject the circuit judge charged the jury as follows:

“There has been no testimony received in this case which shows any legal adoption or apprenticeship of this child by Burt or his wife, and I charge you that the only purpose for the receipt of the testimony respecting what Burt has said in relation to wanting this child or having adopted the same is to bear upon the question of the probability of the contract being made, as claimed by the plaintiff. Take into consideration, gentlemen, in connection with that, the reasons that have been given why they claimed the child to be theirs, if such claim was made, and if you find that such apprenticeship papers were actually made, and what they said in relation to That, if they said they had such papers, and that is the claim in part, I think, as throwing light upon their understanding at the time. Did they at that time consider that they were keeping the child by reason of a contract? Was it probable that they were so doing if they at the same time were holding out that they kept the child by reason of the apprenticeship papers? Not because the apprenticeship papers were binding or were of any legal force; it only throws light upon the credibility of the parties. Were their statements then consistent with what they have made in this court, or were they made for the reason that plaintiff claims,- — simply to hide the disgrace of the girl Phoebe? Take into consideration the relationship of the parties, the fact that Phoebe was the sister of the plaintiff’s wife, all the circumstances that have been divulged by the testimony bearing upon the proposition.”

He further charged the jury, at the request of the plaintiff:

“I charge you that, if you find that the contract was made, the fact of the talk of adoption would not release Mr. Long from his liability under the terms of this contract, if Burt still continued to maintain and support the child, relying upon the agreement of Long; but whether he did so rely you have a right to consider what he may have said.”

And then, on his own motion, added:

“You have a right to determine from all the evidence in the case, that in relation "to the adoption as well as the' other evidence in the case, what was the contract, if any; and, if you find it made as claimed by the plaintiff, did he rely upon the last contract, or was he relying upon something else?”

In addition to this, the court submitted special questions to the jury as folio w*s:

“First. Did the mother of the child Nelson draw up and send to Harriet Burt, wife of the plaintiff, articles of apj>renticeship ?
“Second. Were the same received by Harriet Burt, wife of the plaintiff?
“Third. Did the plaintiff know of such papers ?
“Fourth. Did the plaintiff hold out to the defendant and to the world in general that the child Nelson had been adopted or apprenticed by himself and wife?”

All four of these questions were answered in the negative, and clearly dispose of the adoption or apprenticeship papers, unless, as contended by defendant’s counsel, there was error in excluding testimony on this subject. It is true the court, when the apprenticeship papers were first received, and when it was ascertained that they were made to plaintiff’s wife, and not to plaintiff, and upon the statements of defendant’s counsel that he did not expect to show that plaintiff himself had anything to do about making the papers, excluded the evidence. But subsequently, at page 90, the court said to counsel:

“At this point, it appearing already to a certain extent some testimony has gone in without objection on the part of the plaintiff in relation to certain articles claimed by defendant to have been made by the daughter Phoebe as to apprenticeship, the court now allows the defendant to go into that matter as fully as they offered to yesterday, if they desire; so far as making the offer subject to the ruling of the court as to the materiality of such portions as may be objected to hereafter. I do this, gentlemen, because I think enough already has gone into the case, and the jury have a partial idea of it, the same having gone in without objection, and under objection I shall allow the entire evidence to be considered by them.”

This opened the door fully.

Counsel in their brief say:

“No special question was asked the jury whether plaintiff himself had adopted or apprenticed the child. Neither was any question asked whether the wife of the plaintiff had adopted or apprenticed the child with the knowledge or consent of the plaintiff. Neither was the question asked if the plaintiff had held out to the defendant that he had adopted the child. And neither was the question asked if the plaintiff had held out to the world in general that he had adopted the child.”

When it is considered that the only testimony tending to show an adoption or apprenticeship was that which related to the adoption by the plaintiff’s wife, we fail to understand Avhy this should have been inserted in the counsel’s brief. When a Avitness for defendant, James Long, w'as on the stand, and was interrogated with reference to a talk with plaintiff about having papers for the boy, the court asked of counsel: “You don’t claim that Burt [plaintiff] had anything to do about making the papers, Mr. Miller?” A. “No.” When it was first offered to' shoAV the existence of apprenticeship papers, counsel for plaintiff asked: “Your proposition is this: That these papers, the apprenticeship papers, w^ere made to Mrs. Burt?” Mr. Miller replied: “Yes, sir.”

We think the opportunity offered the defendant to go into this subject was ample; that the court submitted to -the jury the question of whether such papers were made for the only purpose for which they were admissible; and the jury sustained the plaintiff’s theory, and evidently disbelieved the witnesses of the defense.

8. Certain assignments are based upon the rulings of the court in allowing witnesses for plaintiff to explain and give their reasons for their acts in connection with the transaction in question. The facts were such that an inference might, but for the explanation, have been drawn unfavorable to plaintiff’s contention, by assuming the existence of certain motives or reasons. We think the testimony received falls within Ives v. Tregent, 29 Mich. 390, and Hall v. Moriarty, 57 Mich. 345.

9. Complaint is made of the allowance of certain questions to the defendant upon the subject of whether he had caused a complaint for rape to be made against the plaintiff. Defendant’s counsel had drawn out the fact •that plaintiff had been arrested for rape upon the person of defendant’s granddaughter, and this inquiry was proper as bearing upon the animus of defendant. It is urged that the complaint was the best evidence; but the fact that plaintiff was arrested had already been shown, and the inquiry simply related to defendant’s connection with the arrest. He testified that he did not make the complaint, but the inquiry was further pressed to •ascertain whether he had instigated it. It Was competent for the purpose stated.

10. We have carefully examined the exceptions to the charge of the court as given, and to the refusals to charge as requested. We think the court very fairly presented the questions involved in the case for the determination of the jury. There was room for a different verdict, but there was at least equal ground for reaching the conclusion which the jury did.

We think no prejudicial error was committed on the trial, and the judgment will be affirmed.

The other Justices concurred.


author: Long, J.

text:
    TOWNSHIP OF BANGOR v. SMITH TRANSPORTATION CO.
    Personal Taxes — Suit for Collection — Validity of Warrant.
    Where the township treasurer has failed to make a return of unpaid personal taxes, as required by section 55 of Act No. 206, Pub. Acts 1893, a warrant issued by the county-treasurer for their collection under section 56 of the act is void, and no action can be maintained by the township to recover the same, although they were regularly assessed, and payment had been promised.
    Error to Bay; Maxwell, J.
    Submitted June 5, 1895.
    Decided July 9, 1895.

      Assumpsit by the township of Bangor against the Smith Transportation Company for a tax assessed on personal property. From a judgment for plaintiff, do fendant brings error.
    Reversed.

      Simonson, Gillett & Courtright, for appellant.

      T. A. E. & J. C. Weadock, for appellee.
   Long, J.

This is an action in assumpsit brought by the township of Bangor in Bay county, and prosecuted by the treasurer of the township, for the purpose of collecting a personal tax assessed upon the tax roll of the township for-the year 1898. The amount of the tax was $223.21, for which a judgment was rendered upon the verdict of the jury under the direction of the court.

The declaration has a special count, alleging the corporate capacity of both parties; that the principal office of the defendant corporation was in the township of Bangor; that it was possessed of personal property of the value of $13,000 and upwards; that an assessment was-made on account of such personal property upon the tax roll of said township for the year 1893; that the tax roll was approved by the board of review at its regular session after lawful notice; that these taxes were lawfully levied; that a demand was made for their payment, which was promised upon the part of the defendant, and which it neglected to make. The declaration also contains the common counts. The plea is the general issue.

Upon the trial of the case, it was admitted that the assessment roll for the township of Bangor for .the year 1893 was regular in all respects; that upon it there appeared an assessment against the defendant on account of personal property valued at $13,000, upon which certain taxes had been levied, aggregating $323.21; that Charles J. Smith, secretary and treasurer of the defendant company, at a time when demand was made upon him for the tax, promised that he would pay the same at a time agreed upon, which promise was not kept.

The tax was assessed under Act No>. 206, Pub. Acts 1893. Section 55 of this act provides that if the treasurer is unable to collect any of the taxes on his roll, assessed on real property, he shall make a statement of the same, with the name of the owner, a description of the land, etc. It also provides:

“The said treasurer or collector shall also make a statement showing the faxes upon personal property remaining unpaid, and the names of the persons against whom assessed, and the amount against each, and in such statement shall set forth the amount of all monej's collected by.him on account of taxes, which statement shall be verified by the affidavit of such treasurer, in which he shall state, in substance, that the sums mentioned in such statement.as uncollected remain unpaid; that he has not, upon diligent inquiry, been able to discover any goods or chattels belonging to the person liable to pay such sums whereupon he could levy the same; and that the amount of moneys collected by him upon such tax roll is truly stated therein.”

It is not contended but that the tax was valid in all respects, or that the town treasurer had not proceeded to discharge every duty in relation thereto, except that he had not made the statement required by the above provision of the statute, and filed the same with the county treasurer. The claim is that, because the town treasurer failed to make this statement of uncollected personal taxes, there was no authority for the county treasurer to issue his warrant to the towm treasurer to collect them, and that no suit could be maintained against the defendant for their payment.

This same provision of the statute i,s found in section 44, Act No. 153, Pub. Acts 1885. Under that act the cases of Township of Port Huron v. Totts, 78 Mich. 435, and City of Muskegon v. S. K. Martin Lumber Co., 86 Mich. 625, arose. These cases were brought to recover for personal taxes, and the same question arose as here. It was held in each that no recovery could be had by the township, for the reason that no return had been made by the treasurer as provided by section 44 of that act. We are unable to distinguish this case from those.

Judgment must be reversed, and a new trial ordered.

The other Justices concurred.


text:
    TWITCHELL v. GOEBEL.
    Use axd Occupation — Pleading.
    A declaration alleging that the-defendant agreed, “as per lease attached and made part of this declaration,” to pay plaintiff a specified sum per month, for one year, for the rental of certain premises, and to perform certain other conditions, all of which he had neglected and refused to do, is sufficient if not demurred to, a copy of the lease being attached as stated, to authorize a recovery for use and occupation.
    Error to Washtenaw; Kinne, J.
    Submitted June 6, 1895.
    Decided July 9, 1895.

      Assumpsit by Stoddard W. Twitchell againsfUPeter H. Goebel for rent. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      M. J. Cavanaugh and T. A. Bogle, for appellant.
    D. Cramer, for appellee.
   Long, J.

In this action the plaintiff is seeking to recover for rental of premises by virtue of the terms of a lease made on the 23d day of March, 1893, between Dens-more Cramer, attorney for Stoddard W. Twitchell, and Peter H. Goebel. Summons was issued on the 21st day of March, 1894, requiring defendant to appear and answer plaintiff in a plea of trespass on the case. On the 4th day of April, 1894. plaintiff, by his attorney, Mr. Cramer, filed a declaration, with copy of lease attached, declaring on the common counts in a plea of trespass on tin-case apon promises. The declaration contained no count for use and occupation, but in its place the following statement was inserted:

“For that the defendant on the 23d day of March, 1893, agreed, as per lease attached and made part of this declaration, with plaintiff, at said county of Washtenaw, to pay said plaintiff the sum of $35 each and every month in advance, for one year, for what is known as the 'Bobcut’s House Premises,’ at Fenton, Michigan, the same being for the rent thereof, which rent was to commence April' 1, 1893, and was to keep said premises in good repair and good order during said year, and leave the same in good order, and with the rent fully paid, all of which the defendant has neglected and refused to do, to the plaintiff’s damage of $150.”

The defendant pleaded the general issue. At the trial the claim was for rental of premises by virtue of the terms and conditions of this lease. Upon the pleadings and statement, the plaintiff was permitted to introduce the lease in evidence, and a recovery was had in his favor.

Counsel for defendant contend that the declaration was not sufficiently specific to permit-a recovery for use and occupation, as the lease was no part of the declaration. The declaration was not demurred to. It contained a copy of the lease, which is made a part of the special count, and the court helow properly held that a recovery could be had thereunder for use and occupation. It was. admitted that defendant went 4,’nto possession under the lease.

The only other controversy was over the amount which the defendant had expended, as he claims, by direction of Mr. Cramer. This question was left fairly to the jury under the charge of the court. The jury returned a verdict in favor of plaintiff.

The judgment must be affirmed.

The other Justices concurred.