text:
    GRANGER v. FARRANT.
    1. Automobiles — Negligence—Personal Injuries — Evidence.
    While it was material, in a personal injury action, brought for injuries caused by a motor car owned by defendant running into an automobile in which plaintiff was riding, to show the condition of the car owned by defendant after the occurrence, the trial court committed error by receiving in evidence repair tickets from the records of the defendant showing that no such repairs had been afterwards made to the automobile, as plaintiff’s evidence tended to show would have been required. The evidence was self-serving in its nature and was incompetent as hearsay.
    2. Evidence.
    In order that hearsay evidence may be admitted, showing declarations made by a party not against his interest, they must have been made before suit was commenced, and before a controversy originated between the parties.
    3. Same — Memoranda—Correspondence.
    .Such cards and a letter which the defendant wrote to a third person regarding repairs, all offered to show that no such repairs as claimed were made on defendant’s automobile after the alleged collision, should have been excluded as self-serving.
    4. Same — Trial—Charge—Negligence.
    Where plaintiff’s evidence tended to show that the defendant’s car approached the one in which plaintiff was riding, from the rear, without warning, and passed at an unlawful rate of speed, turning so close to the front of the other car as to strike and force the automobile over an embankment, injuring the plaintiff, it was error to charge the jury that if defendant’s car hit the other but did not send it over the embankment the alleged negligence would not be the proximate cause of the injury. Plaintiff was entitled to recover if the defendant drove his car so near that in which the plaintiff was that it caused the driver to swerve too near the edge of the embankment, even though the force of the alleged collision was not sufficient to throw the automobile out of its course.

      ■5. Same — Evidence—Negugence.
    Whether plaintiff’s driver was guilty of contributory negligence in not stopping or controlling the car, was a proper issue for the jury.
    6. Same — Contributory Negugence — Imputing Negugence.
    And plaintiff could not recover if the driver of the car in which she was riding by invitation as a guest was guilty of negligence.

    Error to Kent; McDonald, J.
    Submitted November 25, 1913.
    (Docket No. 133.)
    Decided March 26, 1914.
    Case by Bertha Granger, by her next friend, against Walter S. Farrant for personal injuries. Judgment for defendant. Plaintiff brings error.
    Reversed.

      Ellis, Colwell & Ellis, for appellant.

      Dunham & Dunham, for appellee.

       The question of iDaputed negligence of driver to passenger is discussed in an extensive note in 8 L. R. A. (N. S.) 597.

   Stone, J.

In this case the plaintiff, a married

woman, under 21 years of age at the time of bringing suit, seeks to recover damages against the defendant for injuries claimed to have been received on the 30th day of July, 1910, in the afternoon of that day, while the plaintiff was riding, by invitation, with one Frank Skinner and his wife, in a Reo automobile on the highway in Ionia county near Lake Odessa. They were traveling in a northwesterly direction, and, at a railroad crossing of the highway, it is the claim of the plaintiff that defendant, operating and driving a Chalmers automobile, came up behind Skinner’s automobile, in which the plaintiff was riding, driving at an unreasonable and unlawful rate of speed, and without warning passed them on the left, then swerved suddenly to the right, ahead of Skinner’s automobile, and forced it over an embankment, throwing the plaintiff out and severely injuring her by breaking her arm and inflicting permanent injuries.

All of the occupants of the Reo car testified, in substance, that the defendant, just as Skinner’s automobile was going onto the railroad crossing, without blowing his horn or giving warning, suddenly ran up beside them at the west end of the crossing, and went diagonally across the road in front of the Reo car, striking it, as they judged by the jar and grating sound. There was an intersecting road immediately ahead of them at this point known as the “Lansing” road.

It is the claim of the plaintiff that the Reo car, in which she was riding, crossed the east end of the planks on the railroad crossing, and, in order to follow the road to Lake Odessa, which he desired, it was necessary for Skinner to turn a little to the left. It was while he should have been making this angle that it is claimed the defendant’s automobile ran down diagonally across the road in front of him, cutting off all space on the Lake Odessa road.

The declaration, after alleging the duty of defendant, contains the following averments:

“And the said defendant, totally disregarding his duties as provided by statute, and his reasonable duties in the premises, after crossing the said railroad crossing, and at the intersection of the highways, did operate and direct his automobile, which said automobile was then running at the rate of speed of 30 to 40 miles an hour, diagonally across said highway, so that his said automobile struck and came in contact with the front wheel of and otherwise came in contact with the said automobile so driven by the said Frank Skinner and so occupied by the said plaintiff, thereby causing the said automobile so driven by the said Frank Skinner, and so occupied by the said plaintiff, to leave the highway and run down a bank, to wit, 6 feet high, over rough and impassable ground, so that the automobile came to a sudden stop, and the said plaintiff and the other occupants of the said automobile were thrown from said automobile to the ground.
“And the said defendant, further disregarding his duty in the premises, when he passed the said automobile so run by the said Skinner and occupied by the plaintiff, as aforesaid, did not slow down to a reasonable rate of speed and run in and upon the space at the left side of the middle of the traveled portion of the highway, and in such manner as not to come in contact with or interfere with the peaceable and lawful rights of the said Skinner and the plaintiff, and did not slow down and run his automobile at a reasonable rate of speed, and did not pass through and over the space between the automobile so run by the said Skinner and occupied by the plaintiff and the westerly side of the highway over the space left by said Skinner for that purpose; but, on the contrary, carelessly and negligently, and without any caution, or taking any means to protect the rights of this plaintiff, ran and drove his automobile close to and against and struck the automobile so run by the said Skinner and occupied by the said plaintiff, so that the said automobile run by the said Skinner and occupied by the said plaintiff left the highway and ran down an embankment, thereby causing great injury to this plaintiff as hereinafter set forth.
“And the defendant, further disregarding his duties in the premises, when approáching the automobile so run by the said Skinner, and so occupied by the plaintiff and Mrs. Skinner, gave no warning of his approach, and did not ask or communicate his desire to pass; but, on the contrary, with great force and violence, carelessly and negligently ran his said automobile with great speed at and against the said automobile so run by the said Skinner and occupied by the said plaintiff.”

Frank Skinner, the driver of the Reo automobile, testified, among other things, as follows:

“I just got nicely on the railroad track, and I heard a noise at the left-hand side of me. It sounded to me like a motor sounds when you are driving along at a high rate of speed and your engine is speeded up. You release the clutch, your engine takes the surplus power without anything connected with it, and that is the way it sounded to me, and as I heard it I turned my head, and I saw an automobile aside of me, right onto me, and they seemed to be coming in an angling way across the track towards me, and, just as I got across the track, they hit the front end of our machine, and the blow was pretty hard. It sounded to m'e like the fenders coming together. And that is the last I knew what it was, until I picked myself up from under the car.
“Q. What effect did it have on the car; where did it go?
“A. It took it right off from the bank, right down into the ditch. I was thrown out of the car, and found myself under the car, under the running board. Mrs. Granger was lying on her back with her head near my feet. * * * This other machine was on the left-hand side of me, and, when it ran across and in front of me, it came so close to the east side of the road that it pushed the sand right down the side of the road that way. It practically shut me off so that I could not turn at all. If my machine ran, it either would have run into that machine or go down off the bank.”

, Mrs. Eva Skinner, wife of Frank Skinner, speaking of defendant’s car, testified, in part, as follows:

“We were just going on the railroad track when I noticed it. I should think that the front of their machine at that time was just about where Mrs. Granger and I sat, even with our back seat. They cut right in ahead of us just after we left the crossing. They ran right towards the front of our machine. I remember that they gave a bound, and it seemed as though their fenders struck ours. I know I heard a noise, and I wondered what would become of us. I heard a noise of the machines coming together; and the next I knew I was going over the bank, and the next was picking myself up.”

She then testified that defendant’s car did not stop, but pushed on rapidly towards Grand Rapids.

The plaintiff upon this subject testified as follows:

“I was sitting in the Skinner machine on the left-hand side in the back seat with Mrs. Skinner. I do not know how I happened to notice the machine back of us; do not remember of hearing anything. I just looked around and saw it. Mrs. Skinner spoke about the same time that I looked around about the machine. The next that I saw the automobile that was following us was just before we struck the railroad track. We were just a little way — just a short distance — from the railroad crossing. At that time it was behind us. I looked towards the center. I think Mrs. Skinner looked around when I did. As to the distance I was from the railroad crossing I cannot tell. It seemed to me that we were nearly to the tracks. Then, shortly after that, we heard the machine. It was immediately, and we were then on the tracks. We were on the right-hand side going across the railroad track, I think so, and the other machine was on the left-hand side of us, very close. At that time I noticed a big noise, a very loud noise, and I noticed a terrible bound, and everything else happened at once. I heard the noise and felt a jar. The noise, as I remember it, seemed to me as a metallic sound, a sort of grating. Just an instant, and a jar and everything was all at once. The last I remember was I kind of caught my breath. * * *
“Q. What can you say, • witness, as to whether or not the machine struck you?
“A. Why, I heard the noise and a sound and a jar.
“Q. Now, when was the next thing you knew; that you can remember about the transaction?
“A. Why, I do not remember any more about that. The next I remember I was in bed.”

Witness then described her injuries, and claimed that she received permanent injuries at that time.

To show that the cars came in contact, the plaintiff offered evidence showing the location of the tracks, the condition of the hub cap on the machine in which the plaintiff was riding, and the condition of the fenders; and also showed that they made an immediate effort at Grand Rapids, where the defendant resided and owned a public garage, to see the defendant’s machine, but did not succeed, as it appeared that the defendant had secreted his automobile.

On the other hand, the defendant claimed, and gave evidence tending to support his claim, that he did not pass the Skinner car at the place named, but that he passed it before reaching the railroad crossing; that he did not touch or run against the Skinner machine at all, but passed 5 feet away from it, 25 or 30 feet south of the railroad crossing; and that his machine was not broken or injured in any way. The defendant learned on his arrival in Grand Rapids the same day of the injury that information- had been conveyed by telephone to police headquarters; that the. plaintiff was seriously injured; and that it was claimed the defendant had caused the injury. This suit was begun by capias ad respondendum, and defendant arrested thereon on August 8, 1910.

It was conceded that the factory number of the Chalmers automobile, operated on the day in question by the defendant, was 13055. Defendant’s said automobile was taken from the public garage on the evening of the accident, and placed in his barn at his residence in Grand Rapids, and remained there nearly all the time until it was sold on the 13th day of August following. As tending to show that this machine was not injured and had no marks upon it, the defendant was permitted, over the objection and exception of the plaintiff, to introduce in evidence certain cards or tickets, which, it was claimed, were made at his garage or place of business, showing when any work was done on a car; that these cards or tickets were kept at defendant’s place of business, and were filed in numerical order. Many of these tickets or cards were offered and received in evidence.

Exhibit 20 is a fair sample:

“Repair and Sales Record.
“August 10, 1910.
“Owner: Roadster 13055.
“Instructions: Drain all oil out of motor and put in fresh; clean clutch disk thoroughly with kerosene. Lubricate clutch properly with about 2% oil in clutch case, mixed with about % kerosene. Tighten clutch slightly and evenly.
“Date: ........ Workman: H. E. Time: 2 hours.
“Oil % pt. K. 3-4. 12 10c.
“Inspected: H. E. 1 8-15.”

The following objection -was made by plaintiff’s counsel:

“I object to this ticket. I do not know of any case that makes this kind of matter, after the transaction has occurred, competent. What Mr. Farrant did after that time, his own acts or his bookkeeper, does not matter in any way. It is not am outside bookkeeper’s business; it is just what Farrant did. It is incompetent evidence, I think what he did is self-serving, matters done by him or his agents after this transaction.”

Defendant’s counsel:

“I think it competent. It has been held that where regular files are kept connected with a business, where the business is of such volume that regular files are kept, and these files are produced, such as railroad company files, or any business that requires a large number of such things to be made, and requires help to do it, that these are competent evidence.
“The Court: I will receive it.
“Plaintiff’s Counsel: Note an exception.”

Another ticket offered and received in evidence bore date the 11th day of August, three days after the case was commenced. It was objected to as a self-serving declaration made by the defendant, or by his help. It was the claim of defendant’s attorney that they all referred to work done on the machine.

It appeared that the defendant was the agent at Grand Rapids of the Chalmers Motor Car Company of Detroit; that on the occasion of the injury to the plaintiff the defendant was returning from a visit to the Chalmers Motor Car Company at Detroit; that, while in Detroit, the radiator upon the automobile which he was driving’ had been changed by the said company by reason of a leak or defect in the radiator, and one of a different color had been placed upon the machine. Just what materiality there was in this circumstance it is difficult to' discover.

The trial court, however, allowed the defendant to introduce in evidence a letter reading as follows:

“W. S. Farrant.
“Grand Rapids, Mich., Aug. 10, 1910.
“My Dear James:
“This is purely personal. I want to get your advice. You remember the exchange of radiators— putting on an unpainted one in place of the one that had been defective and leaking since received. I today received invoice R — 45847 for labor and expense repairing radiator exchanged on car, net $15.00, and 6 hours’ labor $3.00, total $18.00. I do not mind the labor. We do not charge our customers for labor or parts, when they have defective parts. Is this right or is it an error? Tell me how you view it and how you would handle it, and I would appreciate the favor very much, and I will then write to the proper department.
“Yours very truly,
“Farrant.
“Mr. Jean Bemb, Chalmers Motor Co., Detroit, Mich.”

This letter was objected to by plaintiff’s counsel as irrelevant, immaterial, and a self-serving statement made after the injury of the plaintiff. It was received over the objection and an exception.

The case was submitted to the jury, and in the course of its charge the court instructed the jury as follows:

“It is not necessary for me to say anything further to you about the claims of negligence, because of the theory of the defendant and because it is conceded by the defendant through his attorneys that if he (the defendant) ran his car diagonally across the road from the left side to the right, and struck the Reo car, so as to cause it to be deflected from its course and to run over the bank, that he was negligent, and is liable in this action for any damage that the plaintiff sustained. I charge you, as a matter of law, that if you find by a fair preponderance of the evidence that the defendant, Walter S. Farrant, handled, managed, and controlled his Chalmers car in the afternoon of July 30, 1910, and drove it diagonally across the highway north of the railroad track, and struck the front hub of the Reo car, so as to cause it to turn to the right and run over the bank, and that the plaintiff suffered injury and damages by reason thereof, then the defendant Farrant was negligent, and is liable to the plaintiff in this action.
“So you will understand, gentlemen of the jury, that as to the first question you have to determine— that is, the alleged negligence of the defendant — the question is: Did the defendant, Walter S. Farrant, run his car diagonally across the highway into the car in which the plaintiff was riding, and by reason of striking it on the left hub, drive it off the road and' over the bank? Plaintiff cannot recover unless she convinces you by a fair preponderance of the evidence that the defendant, Farrant, did so negligently drive his car. If you do not find by a fair preponderance of the evidence that the defendant Farrant did so run his car as to strike the Reo car and drive it over the bank, then you need not further consider the case; for in such event your verdict must be no cause of action.”

This language was, in substance, reiterated a number of times in the charge. The court, however, called the jury’s attention to the statutory duties of a person operating a motor vehicle upon á public highway as to rate of speed and proper management.

There was an averment in the declaration that the conduct of the defendant had been wanton, reckless, and wilful, and the court instructed the jury on that subject as follows:

“These statutory duties and any violation thereof, if you find there were any, you may consider in determining this question of added damages. I have mentioned these things to you for the application that they had in this case on the question of added damages. They have no application to the first question —the question of defendant’s negligence — that is, as to. his liability for his negligent act. A violation of these provisions of the statute is evidence of negligence, but under the circumstances of this case, as I have before explained to you, you may consider such violation only in determining that the defendant acted wantonly, wilfully and recklessly. * * *
“And, gentlemen of the jury, I charge you, as a matter of law, that the defendant, Walter S. Farrant, is not here on trial because he did not slow down his automobile, and is not on trial for the purpose of determining whether he did or did not run his car at a reasonable and moderate rate of speed, neither is he on trial for the purpose of determining whether or not he expressed a desire to the occupants of the Reo car to pass, either by tooting his whistle or calling to them and asking the driver, Skinner, to let him pass; that, so far as the defendant is concerned, in the first instance — that is, the alleged negligence of the defendant — your inquiry is limited to the one single question as to whether or not he did so run and operate his car, after crossing the railroad track, as to run it into the Reo car with such force as to drive the Reo car from the highway.
“I told you that these various alleged violations of the statute were to be considered by you as bearing on the question of added damages. On the questions of defendant’s negligence in passing the car, I have explained to you that these various statutory duties do not under the circumstances in this case apply.”

The jury, after being out for a time, returned into court and asked for further instructions. The following occurred:

“The Court: Gentlemen of the jury, are you having some difficulty in regard to the law in this case?
“Foreman: We are. If Farrant’s car hit this Skinner car, but not hard enough to knock it out of its course, what were-your instructions?”

After ascertaining that this was the definite question, the court proceeded as follows:

“Mr. Farrant would not be liable unless his act was the proximate cause of the injury; that is, the cause that produced the injury. I said to you that the plaintiff must convince your minds by a fair preponderance of the evidence, first, that the defendant was negligent, and that his negligence was the proximate cause of the injury. Now, if his car hit the other car, but did not send it over the bank — if his car hit the other car, but the hitting of the car did not produce the injury — then, though he were negligent, his negligent act would not be the proximate cause of the injury, and he would not be liable. Do I make that plain to you?
“A juror: It is to me.”

Thereupon the jury again retired, and, after being absent for a time, returned into court and rendered a verdict of no cause of action, and judgment was entered accordingly for the defendant.

The plaintiff has brought the case here upon writ of error, and, while there are many assignments of error, we shall not find it necessary to consider them all in detail.

(1) By appropriate assignments of error, it is claimed that the court erred in permitting the introduction in evidence of the tickets or cards and letter which have been referred to.

The question as to the condition of these cars after the alleged collision was material. Did the court err in receiving in evidence the cards and letter above mentioned? If this evidence had any materiality whatever, it was its tendency to show the condition of the Chalmers car after the injury complained of. The effort is made by these cards to show by elimination that no repairs were made upon this car, except such as are mentioned in the respective cards, which show nothing by way of repairs to the fenders or the hub caps. It has already been noted that these cards were prepared at defendant’s garage after the alleged injury, and some of them after the commencement of this suit. We think that such cards and letter were incompetent, as well as immaterial, and were self-serving statements made after the fact.

That certain work was done on this car was no evidence that there were not other defects which required repairs, even if the evidence was competent. As was said by this court in Grand Rapids, etc., R. Co. v. Huntley, 38 Mich. 537, at page 544 (31 Am. Rep. 321):

“The general rule in regard to other classes of hearsay evidence and statements admitted upon the same principle is that they must have been made ante litem motam, which is interpreted to mean not merely before suit brought, but before the controversy exists upon the facts.”

In Vanneter v. Crossman, 42 Mich. 465, at page 468 (4 N. W. 216), this court said:

“The declarations of a party may be given qgainst his own interest, and when a part of an entire statement or conversation is so given, he may adduce whatever has been omitted which bears in any way upon the rest. But he cannot, by collateral statements outside, make evidence for himself” — citing authorities.

See, also, Kehrig v. Peters, 41 Mich. 475, at page 478 (2 N. W. 801), where this court said:

“There was no error in exclúding exculpatory remarks made by Kehrig to third persons, in no way constituting parts of transaction which would give them the character of res gestae. He could not make testimony for himself by telling third persons he was innocent.”

See, also, Dundas v. City of Lansing, 75 Mich. 499 (42 N. W. 1011, 5 L. R. A. 143, 13 Am. St. Rep. 457); Jones v. Village of Portland, 88 Mich. 598, 605 (50 N. W. 731, 16 L. R. A. 437); Baumgardner v. Henry, 131 Mich. 240 (91 N. W. 169); Lord v. Savings Bank, 132 Mich. 510 (93 N. W. 1063); Comstock v. Georgetown Township, 137 Mich. 541, 561 (100 N. W. 788); Drake Coal Co. v. Croze, 165 Mich. 120 (130 N. W. 355).

In the case last cited we undertook to state the rule in this State, and referred to many authorities upon the subject. We there said:

“This court has repeatedly held that a self-serving statement is not admissible on behalf of the party making it, and that the corroborating of the party in a material part of the case by his own statement is not permissible” — citing authorities.

In Burley v. German-American Bank, 111 U. S. 216 (4 Sup. Ct. 341), it was held that entries in the books of one party.to a transaction, not contemporaneous or made in due course of the business as a part of the res gestae, but made after the rights of the other party had become fixed, are not competent evidence.

We are constrained to hold that the trial court erred to the prejudice of the plaintiff in admitting in evidence the cards and letter above referred to.

(2) This brings us to the assignments of error relating to the charge of the court, in connection with that part of the declaration above referred to.

It is true that the evidence on the part of the plaintiff sought to show that the defendant’s car collided with the car in which the plaintiff was riding. But the evidence of the plaintiff was not confined to the claim that, by reason of the collision, the car in which the plaintiff was riding was forced or pushed over the embankment. We think it was material for the plaintiff to show that the defendant was operating his car at an unreasonable and unlawful rate of speed, and that, without notice or warning, he came upon and passed the Skinner car, and forced his car across and in front of the Skinner car, in such a manner as to disconcert the driver, and cause his car to go over the embankment, to the injury of the plaintiff; and that defendant might be liable, even if the jury should have found that the impact was not sufficient to forcibly throw the Skinner car out of its course.

If, for instance, it should appear in a given case that A. unlawfully struck at or hit B. in such a manner as to cause B. impulsively or instinctively, without time to consider, to step back into a deep hole to his injury, he being taken unawares, could it be said that A. was not responsible for the injury? So here, had the jury found that, by reason of the defendant bringing his car in contact with the Reo car, Skinner was taken unawares, and, seeking to avoid injury to the defendant’s car, he was compelled to go so near the embankment as to lose his balance and go over, can it be said that there was no liability on the part of the defendant? We think not. We think that the court, in its instructions, narrowed the issue to the prejudice of the plaintiff’s case, and it is apparent from the colloquy between the court and jury, at the time they returned for further instructions, that they were having difficulty upon the identical point we are here considering. We think it was competent for the jury, under the evidence and the law, to consider the course and conduct pursued by the defendant, as bearing upon his negligence, and that there might have been a recovery if the jury found that the defendant negligently hit the Skinner car, but not with force sufficient to push it over the embankment. If the jury became satisfied that the coming in contact with the Skinner car, by • improperly swerving to the right on the part of the defendant, was the proximate cause of the injury, then, we think, the plaintiff might recover in this case, even if the car in which she was'riding was not pushed over the embankment by the defendant.

The evident object of the statute regulating the driving of automobiles in public highways was to prevent danger of collision and like accidents which are likely to occur where the statute regulations are not observed. Potter v. Moran, 61 Mich. 60 (27 N. W. 854).

In National Casket Co. v. Powar, 137 Ky. 156 (125 S. W. 279), it was held that the statute of Kentucky, similar to ours, limiting and regulating the speed of automobiles approaching the intersection of highways, and requiring warnings of approaching travelers, is declaratory of the common law of negligence, and adds to it certain standards of care on the part of operators of automobiles, and that a violation thereof is negligence per se, and forms a sufficient basis for an action for injuries caused thereby, to another using the highways. Probably the better rule is that such violation would be evidence of negligence. The only matter left to the jury by the trial court was the force of the blow or collision. In this we think there was error.

The trial court seemed to be of the opinion that the immediate cause of the injury was the car running over the bank, and that this was the proximate cause of the injury. We think the proximate cause of the injury may have been, as above indicated, that which preceded the going over the embankment, and that the defendant cannot evade liability, if it is made to appear that the injury was the natural result of his negligent conduct in thus causing the collision.

Whether the plaintiff’s driver, Skinner, was guilty of contributory negligence in not stopping or controlling his car was, we think, a fair question for the jury, under proper instructions; and, if the jury should find the driver was guilty of contributory negligence, such negligence might, under our decisions, be imputed to the plaintiff. Colborne v. Railway, 177 Mich. 139 (143 N. W. 32); Mullen v. City of Owosso, 100 Mich. 103 (58 N. W. 663, 23 L. R. A. 693, 43 Am. St. Rep. 436).

In our opinion the court erred in thus narrowing the issue, and the same was prejudicial error. -

The other questions urged by appellant are not likely to arise upon a new trial, in view of what we have already said.

For the errors pointed out, the judgment of the circuit court is reversed, and a new trial granted.

McAlvay, C. J., and Brooke, Kuhn, Ostrander, Bird, Moore, and Steere, JJ., concurred.


source: Caselaw Access Project

author: Stone, J.

license: Public Domain

text:
    GERMAN LUTHERAN CHURCH SOCIETY v. CITY OF MT. CLEMENS.
    1. Municipal Corporations — Necessity—Improvements.
    A resolution of the common council of a municipality determining the necessity for making a public improvement, such as the construction of a sewer, is necessary to the validity of the proceedings.
    2. Same — Taxation—Sewers and Drains — Special Assessments.
    The sole ground imposing a part or all of the cost of a public improvement upon one part of a municipality is that the part burdened with the cost receives corresponding benefits which the general public does not receive.
    3. Same — Basis op Tax — Uniformity.
    The legislature may not authorize the governing body of a municipality to fix an arbitrary basis for an assessment to be imposed upon property without regard to benefits, nor can a property owner be charged with an assessment greater than the benefits.
    4. Same.
    Where the estimated cost of constructing a sewer exceeded the actual expense, and the city attempted to collect special assessments therefor in excess of the true cost, after sufficient money had been paid to reimburse the city, which shared one-third of the entire expense, the court in chancery will relieve the property owners from paying any further demand. Act No. 546, Local Acts 1907, 'does not contemplate the collection of any sum in excess of the cost of the sewer.
    Appeal from Macomb; Murphy, J., presiding.
    Submitted April 16, 1913.
    (Docket No. 79.)
    Decided March 26, 1914.
    Bill by the German Lutheran Dreieinigkeit Church Society and others against the city of Mt. .Clemens to vacate a special improvement tax. From a decree for the defendant, complainants appeal.
    Reversed.

      Martin Crocker (Erskine & Lungerhausen, of counsel), for complainants.

      William T. Kelly (Robert F. Eldredge, of counsel), for defendant.
   Stone, J.

The complainants, by their bill of complaint in this cause, seek to restrain the defendant city from collecting that part of a special assessment for the construction of a lateral sewer in Gibbs street, in the city of Mt. Clemens, lying between Dickinson avenue and Judge street, in excess of its actual cost, and to remove the cloud caused thereby from the title to their lands. The sewer in question had. been completed at the time of the filing of the bill, and its entire cost ascertained and paid. It is a small, lateral crock sewer 734 feet long, with four catch-basins. It is 4.71 feet deep at its beginning at Dickinson avenue, and 7.G4 feet deep at its terminus. It is alleged in the bill, and admitted in the answer, that the total cost of the sewer was $314.92.

The following is an extract from the annual appropriation bill of May, 1910, of the council proceedings:

“A crock sewer on Gibbs street between Dickinson avenue and Judge street, the city’s share of which is estimated to be $700.”

Upon that subject the common council of the city, on June 6, 1910, passed the following resolutions:

“Resolved further, that there shall be assessed for special benefits arising from the construction of said sewer upon all taxable lands and premises included in said special assessment district above established, the sum of forty-five cents per foot frontage upon said Gibbs street of said several parcels of land in said district, which said sum of forty-five cents per foot is hereby determined as being one-third of the actual cost of constructing the average crock sewer in said city at this time, and that the balance of cost of said sewer be paid by the said city of Mt. Clemens at large and out of the general sewer fund of said city.
“Resolved further, that the board of special assessors be and is hereby ordered to levy upon each lot and parcel of land abutting- upon said portion of said Gibbs street lying within said special assessment district above established, the sum of thirty-five cents per foot frontage of said lot or parcel of land upon said Gibbs street, and report the same to this council with all convenient speed.”

The decision of this case has been delayed owing to the condition of the record. Counsel for defendant and appellee, in his brief, uses the following language:

“May 23, 1910, the council adopted a resolution declaring its intention to construct this particular lateral sewer on Gibbs street, fixed a special assessment district consisting of the abutting land as a proposed assessment district, directed the preparation of a plat and diagram and estimate of the cost to be filed in the city clerk’s office, and set June 6, 1910, as the time for the meeting of the council ‘to hear and consider objections and suggestions relative to said proposed sewer and said proposed special assessment/ and directed notice to be published. On June 6, 1910, none of the landowners or other parties interested filed or made any objections to this proposed sewer or district, and at that time the council adopted a resolution declaring that it was necessary for the proper drainage of the city, and for the public health, to construct said sewer, that the lands in the assessment district would be benefited by the construction thereof, and that such benefit would exceed in amount the proposed assessment, and determined, therefore, to build the sewer, adopted the plan and diagram filed, and directed the board of assessors to make special assessments.”

Upon turning to the record to find such resolution, and not finding it there, we sent for the original return, and then found that neither the testimony nor the case as settled had been returned to this court. They have since been returned, and there is nothing in the record that shows any resolution of necessity by the council as required by the statute. This might be sufficient to dispose of the case, as such a resolution has repeatedly been held to be jurisdictional, and an essential prerequisite to further proceedings. However, as the point has not been made by the solicitor for the complainants, we have concluded to dispose of the case upon other grounds.

In 1907 the legislature enacted a local statute (Local Acts 1907, Act No. 546) entitled as follows:

“An act providing for uniform assessments for defraying a portion of the cost of the construction of sewers in the city of Mt. Clemens, Michigan.
* * * * * *
“Sec. 2. The cost of any branch, lateral or local sewer, constructed within a special district, shall be paid from the general sewer fund; but before any such branch, lateral or local sewer is constructed, the common council shall fix the limits of a special assessment district, which shall include all the taxable lands and premises touching or abutting that portion of the street, lane, alley, highway or avenue along which said branch, lateral or local sewer is to be constructed; and in the making of such assessment, in the review and collection of the same, the common council shall •conform as near as may be to the provisions of act number 215 of the public acts of the State of Michigan for the year 1895 as amended; except that, in the making of such assessments, the board of special assessors shall assess each lot or piece of land a sum of money determined by the number of feet frontage such lot or piece of land has touching or abutting that portion of the street, lane, alley, highway of avenue along which such lateral, branch or local sewer is to be constructed. The amount to be assessed for each foot so touching or abutting shall be an amount which the council shall determine from time to time, and which approximately shall be one-third of the actual cost of constructing one foot of an average lateral crock sewer. The money so collected and received by reason of such assessment shall be paid into the general sewer fund.”

This assessment was divided into three equal installments, the first of which was paid by the property holders, and which, with the one-third provided by the city, has paid in full the cost of the construction of the sewer. The property holders on each side of the street were assessed 45 cents per foot frontage, and the first installment of 15 cents, together with the one-third to be paid by the city, amounted to $330.30. Notwithstanding this fact, the defendant city proposed, and was proceeding at the time of the filing of the bill of complaint, to collect the other two installments, placing the amount so collected in the general fund for use for other purposes.

It is the claim of the complainants, and does not seem to be denied by the answer, that it was the purpose of the defendant city to collect the other installments and place the amount so collected in the general sewer fund, and to use the same for other purposes than that of defraying the cost of constructing the sewer in question. In fact, there would be no necessity for the collection of any further sum to defray the cost of constructing said sewer. It seems to be conceded that the assessments proposed would be a lien upon the lands of complainants, and that the defendant proposed to enforce such claimed lien.

The complainant German Lutheran Church Society is a religious society organized and existing under the laws of this State, and as such is exempted from general taxation. Its property is located at the corner of Gibbs street and Dickinson avenue, and it had already sewered into a main or trunk sewer on Dickinson avenue.

It is the claim of the complainants that the said local act is unconstitutional and void. If we should find that other points raised in the case are decisive of it in appellants’ favor, this court will not pass upon the constitutionality of the act. People v. Quider, 172 Mich. 280-288 (137 N. W. 546).

It has been often held that the sole ground for imposing a part or all of the cost of a public improvement upon one part of a municipality is that the part burdened with the cost receives corresponding benefits, which the general public does not receive. City of Detroit v. Judge of Recorder’s Court, 112 Mich. 588 (71 N. W. 149), and cases there cited.

No plan should be adopted which will result in gross inequality of taxation. The burden should be apportioned, as uniformly and equally as may be. The legislature cannot fix, or authorize the governing body of a municipality to fix, an arbitrary basis for an assessment to be imposed upon property without regard to benefits. If this be done, the principle which justifies special assessments on abutting property, namely, that it is thereby specially and peculiarly benefited, is wholly ignored. There can be no justification for any proceeding which charges the land with an assessment greater than the benefits. Cooley on Taxation (2d Ed.), p. 661; State v. Pillsbury, 82 Minn. 359 (85 N. W. 175).

Section 3212, 1 Comp. Laws (2 How. Stat. [2d Ed.] §5734), relating to special assessments, provides as follows:

“Should any special assessment prove insufficient to pay for the improvement or work for which it was levied, and the expenses incident thereto, the council may, within the limitations prescribed for such assessments, make an' additional pro rata assessment to supply the deficiency, and in case a larger amount shall have been collected than was necessary, the excess shall be refunded ratably to those by whom it was paid.”

It appears undisputed in this case that the construction of this sewer cost less than had been estimated or expected by the local authorities. The statute, above quoted, indicates that the legislature contemplated that this condition might arise.

Bearing in mind that special benefits' to all those property owners in the district is the rule to be applied, it is apparent that the amount fixed by the council may not always be sufficient, and sometimes may exceed the cost. The cost of the improvement, however, ought to be the measure of the taxation and the basis of the benefit conferred.

We find nothing inconsistent with the legislation upon the subject when we compare the provisions of the local act, above quoted, with section 3212, 1 Comp. Laws (2 How. Stat. [2d Ed.] § 5734). It is true that the local act provides that the money so collected and received by reason of such assessment shall be paid into the general sewer fund. This is for the reason that the city has already paid the contract price for building the sewer; the object being to reimburse the city. We do not think that by any fair construction-it can be held that the local act requires or contemplates the collection of any sum of money whatever, after the cost of the sewer has been paid, and the property owners in the assessment district have paid their portion of the cost thereof, as provided for in the resolution establishing the assessment district. We must hold, therefore, that the complainants have paid the amount lawfully required, and that they are entitled to be relieved from any further claim or demand in the premises, and are entitled to the relief prayed for in the bill of complaint.

The decree of the court below will be reversed, and a decree entered in this court in accordance with the prayer of the bill of complaint with costs to the complainants.

McAlvay, C. J., and Brooke, Kuhn, Ostrander, Bird, Moore, and Steere, JJ., concurred.


author: Kuhn, J.

text:
    SANT v. PERRONVILLE SHINGLE CO.
    1. Corporations — Accounting—Evidence.
    In a chancery proceeding for an accounting and the winding up of a corporation, evidence considered, and held, to sustain the claim of a stockholder that ¡¡¡2,000 which had been withdrawn by him from the assets had been advanced as a loan to enable the corporation to purchase timber lands, and was not paid as a part of his subscription to stock.
    2. Same — Accounting—Equity—Confusion of Accounts.

      Held, also, that the affairs and accounts of the corporation were not so confused and chaotic as to require the court to apply the doctrine of confusion of goods as to the president and general manager.
    3. Same — Fraud.
    Evidence also held, to sustain the finding of the trial court that the president and manager had not conspired with the secretary to defraud the corporation or complainants, and that in his dealings with the company the president should he charged with losses arising from operating lumber camps.
    4. Same — Stockholders’ Suits.
    That a minority stockholder may file a bill to force an accounting and wind up the affairs of the corporation whose officers in control refuse or neglect to do so, is well settled in Michigan.
    5. Same — Equity.
    In such case it is unnecessary before commencing suit to-demand of those in control to take legal steps in behalf of the corporation.
    6. Same — Equity—Reimbursement—Attorney’s Fees.
    One jointly interested with others in a common fund, who in good faith maintains the necessary litigation to save it from waste and secure the proper application, is entitled in equity to reimbursement for his expenses.
    7. Same.
    And although the corporation consisted only of complainants and defendants as stockholders, and the former alone received benefits from the litigation conducted in behalf of the corporation, it is equitable that the corporation should pay the reasonable expense of restoring its funds and assets.
    8. Same — Attorney and Client — Reasonable Fees — Stockholders’ Suits- — -Costs.
    No contract made by complainants with their solicitor is binding on the court as to the amount of fees. Only such an amount as may be reasonable is allowable out of the fund as expenses to complaining stockholders; and in determining the amount to be awarded for such purpose considerable latitude should be given to the lower court which has better means of determining what is customary and reasonable in the locality in question than has' the appellate court.
    9. Same — Taxed Costs — Witness Fees — Expert Testimony.
    A fee of $1,100 for services of an expert accountant in auditing the books of the defendant corporation was improperly taxed as costs in the suit. The amount, however, might have been allowed as an item of expense and is so treated, on appeal. Taxable costs are limited to such items as are fixed by statute.
    10. Parties — Accounting—Equity.
    The holder of one share of stock of par value $10, who held his stock merely to qualify as director in a corporation, was not a necessary party to a suit to wind up its affairs and for an accounting; where he appeared at the taking of testimony and made no effort to intervene.
    11. Corporations — Pledges—Protecting Interest oe Pledgee.
    Whether or not the stock held by complainants had been pledged to third parties was immaterial, under a decree directing that the amount fixed should be paid only upon the production and surrender of the certificates of stock claimed by complainants; the pledgee being thus protected.
    Appeal from Menominee; Stone, J. (Final decree entered by Flannigan, J.)
    Submitted June 4, 1913.
    (Docket No. 29.)
    Decided March. 26, 1914.
    Bill by Amelia A. Sant and Ralph Sant as administrators of the estate of Abraham Sant, deceased, against the Perronville Shingle Company and Manizeppe Perron, for an accounting and to wind up the corporation. From a decree for complainants, both parties appeal.
    Modified and affirmed.

      Cummiskey & Spencer, for appellants.

      A. L. Sawyer, for appellees.
   Kuhn, J.

This suit was commenced in 1906 by the complainants filing a bill of complaint praying for an accounting of the affairs and property of the defendant company and for its dissolution. The Perronville Shingle Company is a' Michigan corporation, organized in October, 1899. It had a capital stock of $15,000, which was fully paid in, and was divided into 1,500 shares of $10 each, of which 999 shares were owned by the defendant Manizeppe Perron, one share by A. H. Meloche, two shares by Abraham Sant, now deceased, and 498 shares by the complainant Amelia A. Sant. Perron, Meolche, and Abraham Sant constituted the board of directors. Defendant Perron is the president and treasurer of the company, and Meloche its secretary. The company engaged in the business of manufacturing and selling lumber, shingles, and other forest products at Perronville, Delta county, in this State.

The bill charges that the defendant Perron conspired with the defendant Meloche to- convert the assets of the company to the use of defendant Perron, and that they had been' selling and disposing of the corporate property without accounting therefor to the corporation. It further charges that Perron and Meloche, holding a majority of the capital stock, did not intend to institute proceedings in a court to wind up its corporate affairs, and intended thereby to deprive complainants of participating in any way in the profits and property of the corporation. The bill also charges that the company has ceased to operate, and is virtually dead, and it prays that the affairs of the company be wound up, and .that a receiver be appointed to take possession of the assets, with power to collect the accounts and dispose of the assets and pay the indebtedness, and for other general relief. No receiver was appointed, but an order of the court was made that such receiver would not be appointed upon Perron filing a bond in the sum of $10,000 for the payment of any decree which might be entered against him or the defendant company. This bond was filed and the case was referred by the court to a special commissioner to take testimony and report. The taking of the testimony before the special commissioner covered a considerable period of time, and when his report was filed the defendants excepted thereto, and in the fall of 1909 the exceptions to the commissioner’s report were argued before Mr. Justice Stone, then judge of the twenty-fifth judicial circuit.

The Ford River Lumber Company, in August, 1909, filed a petition, claiming to be a creditor of the defendant company to the amount of over $6,000, and asked leave to intervene and to be paid the amount of its claim before distribution of the assets of the defendant company among its stockholders. This petition was also heard before Justice Stone, and on December 7, 1909, he filed an opinion in which the findings of the commissioner were reviewed and a different determination arrived at than the one had by the commissioner, and the court found that defendant Perron was indebted to the defendant company in the sum of $10,884.26, which indebtedness constituted the sole assets of the company. He also ordered that the case be referred back to the commissioner to take evidence and report upon the claim of the Ford River Lumber Company, and upon such other claims as might be presented. The commissioner gave notice by publication to the creditors of the defendant company to present their claims, and the only claims presented were those of the Ford River Lumber Company and A. L. Sawyer, the solicitor of the complainants, for legal services in the cause. The commissioner refused to entertain the claim of Mr. Sawyer, on the ground that it should be presented direct to the court, but found that the defendant company was not indebted to the Ford River Lumber Company and allowed on a cross-bill the sum of $1,865.42- in favor of the defendant corporation. The finding of the commissioner as to the claim of the Ford River Lumber Company was excepted to, and a hearing on this claim was subsequently had before Hon. Richard C. Flannigan, circuit judge, who allowed the claim of the Ford River Lumber Company at $3,443.88. The circuit judge also allowed the solicitor for complainants the sum of $3,000, and allowed costs to the complainants in the sum of $1,579.80. There is no contest in this court concerning the claim of the Ford River Lumber Company, but from the various other provisions of the decree, both complainants and defendants have appealed.

,. The decree of the court provides in part as follows:

“And the court having heard said arguments and considered the same and the proofs and the pleadings herein, and. having filed herein its further opinion and findings upon the remaining issues herein, to the effect that the claim of the Ford River Lumber Company against said defendant Perronville Shingle Company be allowed at the sum of $3,443.88; and that the said claim of A. L. Sawyer against said defendant Perronville Shingle Company for services and disbursements in behalf of said defendant corporation in its "accounting in said cause with the defendant Menasip Perron be allowed at the sum of $3,226.30; and that the costs of the complainants be taxed against the defendants for the following several amounts, to wit:
For disbursements to sheriff, register, court commissioner on original reference, and for printers’ fees according to the items of said bill of costs, aggregating................... $443 70
For witness fees as follows: A. Sant.................... $21 00 D. F. Daley...'.............. 1 10 Fred Leroux ............... 41 00
For expert accountants fees and disbursements ................ 1,100 00 1,336 10
Making an aggregate of complainants’ costs of .............................. $1,579 80
“And it further appearing from the records in this case that the defendant Perron has paid upon the disbursements so allowed to said A. L. Sawyer, pursuant to an order entered herein on the 4th day of May, 1911, the sum of $51.03, thus leaving a balance due said A. L. Sawyer on said allowance of the sum of $3,174.80; and it further appearing from the records and evidence in the case that this action was commenced in behalf of claimants by Messrs. Mills & Cain as their solicitors, and that by agreement between them and the above-named A. L. Sawyer, the said cause has been prosecuted by said Sawyer in the place and ste’ad of said Mills & Cain, and on an agreement between them as to a division of a certain part of the compensation to be received therefor; and it appearing that by such agreement said Sawyer is authorized to collect and receipt for such compensation as may be due all said solicitors for said complainants for their services in said cause, and said accounting between the several defendants having been conducted on behalf of the defendant corporation entirely by the said claimant A. L. Sawyer; and it appearing by computation that interest on the amount so owing by said Menasip Perron to said defendant Perronville Shingle Company from August 12, 1909, to date, at 5 per cent, per annum, aggregates the sum of $1,247.14, thus making the aggregate of said indebtedness to date the sum of $12,131.40.
“And it further appearing that pursuant to orders of this court, entered herein under date of May 4, 1911, the said defendant Menasip Perron has paid for disbursements in said cause, out of the sum so owing by him the sum of $293.50, which, with interest to date, making a total of $301.81, should be deducted from the amount so owing by him, leaving the net balance of his indebtedness to said defendant corporation the sum of $11,829.50:
“Therefore it is ordered, adjudged, and decreed by the court: That the defendant Menasip Perron account for and pay over to the several parties as hereinafter mentioned or to their counsel, so much of the assets of said defendant corporation now in his hands, aggregating, as above mentioned, the sum of $11,829.59, and is hereby decreed to be due to the several claimants thereto and parties hereto as hereinafter specified; that the said claimant Ford River Lumber Company have and recover of and from the said defendants the sum so found to be due to it as above recited, together with its costs by it about its claim disbursed, now here taxed at the sum of $69.60; that the said claimant A. L. Sawyer have and recover of and from said defendants the sum of $3,174.80, the amount so found to be due to him, as above recited, for his compensation and for the balance of his disbursements in behalf of the defendant Perronville Shingle Company,' it being hereby intended that such allowance includes the entire service rendered by said A. L. Sawyer and his associates the said Mills & Cain, at the instance of the complainants and in the interests of the corporation defendant, except such services as have been rendered in the contest of the claim of the Ford River Lumber Company as against the defendant Perronville Shingle Company, for which services, claim by said Sawyer, against said defendant corporation, has been made and is hereby disallowed; and the question of the adjustment of the allowance hereby made to said Sawyer, and as to whether or not any part thereof, and, if so, what portion, belongs to said Mills & Cain, is left to an adjustment between themselves, and is not here determined, said allowance being made to said Sawyer to cover the whole of said services of all said solicitors for the complainants in view of the recitals above, including the delegated authority to said Sawyer to collect such, if any thereof, as properly may belong to said Mills & Cain; that of the remaining balance of said assets, amounting to the sum of $5,121.31, the complainants, in the ratio above mentioned, have and recover of and from the said defendants one-third thereof, amounting to the sum of $1,707.10, together with their costs aforesaid now here taxed against said defendants at the sum of $1,579.80 as above recited; provided, said sum of $1,707.10 so found due said complainants may be required to be paid by said defendants only upon the production and surrender, for the use of the defendants, of the certificates of stock representing the interests of the said complainants in the said defendant corporation, or on the further order of this court; and that said several claimants and complainants, in addition to the amounts above specified, have and recover of and from said defendants interest at the rate of 5 per cent, per annum from the date of this decree, upon the amounts due them respectively; and it is hereby further ordered, adjudged, and decreed that, in default of payment of any of the several sums above provided to be paid, the parties thereto each, respectively, may have execution therefor according to the amount his due.”

The commissioner’s findings with reference to the liability of Perron were based upon the theory that there was such confusion in the assets of Perron and the defendant company that the only equitable solution of the problem would be to divide all the assets of Perron and the company on the basis of the capital invested at the time the company was incorporated. The circuit judge refused to follow the findings of the commissioner as to a pro rata distribution of the assets on the theory of confusion, and proceeded to state an account between the parties.

The claims of complainants as now urged are as follows:

“(1) That the findings of Commissioner Eastman as to a liability of defendant Perron, on account of the confusion of the assets and business of the two defendants by Perron, should be confirmed, modified only to accord with the subsequent establishment of claims against the defendant corporation, and an adjustment should be had on the basis of the capital invested by the company, and by Perron.
“(2) In case such commissioner’s findings are not confirmed on the theory of confusion, and an equitable division of assets because thereof, then the said commissioner’s findings should be confirmed on numerous items of account and business essentially entering into an accounting between the parties, thereby materially increasing the indebtedness from defendant Perron to the defendant corporation, over and above the amount awarded by the findings of Judge Stone.
“(3) The allowance made by the lower court to A. L. Sawyer, as solicitor’s fees for services rendered in behalf of the defendant corporation, should be increased to accord with the petition, and, further, to cover the additional work occasioned by defendant’s appeal.
“(4) As a part of their costs complainants should be allowed their reasonably contracted liability and their disbursements for the expert accountant, Hulsapple, and the mileage and attendance fees of complainant Abraham Sant, as a witness, as set out in the proposed bill of costs, and supported by the affidavits thereto attached.
“(5) The decree as entered should be further altered and modified by expunging therefrom that portion thereof which reads:
‘“Provided said sum of $1,707.10, so found due said complainants, may be required to be paid by said defendants only upon tbe production and surrender, for tbe use of tbe defendants, of tbe certificates of stock representing tbe interests of said complainants in said defendant corporation, or on tbe further order of tbis court.' ”

Commissioner’s Findings. It is urged by complainants that the well-established principle of equitable jurisprudence that the Supreme Court will not disturb the finding of a judge or chancellor unless clearly wrong, he having had the advantage of seeing the witnesses and observing their conduct, should be applicable to cases where reference is had to a master, who in turn reports his findings under the reference. In an early case (Near v. Lowe, 56 Mich. 632, 633 [23 N. W. 448]) this court said with reference to such findings:

“Complainant raises certain legal questions. First, he insists that the report of the commissioner, like that of a referee at law, should be held a conclusive finding upon the facts, so far as it appeared there was any evidence to support it. But this is not the rule in equity. The judge must decide upon the facts on exceptions, according to his own view of what is established by the proofs.”

These findings are considered advisory by the court, and will be accepted or disregarded, according to the court’s judgment as to the weight of the evidence. Kimberly v. Arms, 129 U. S. 512 (9 Sup. Ct. 355).

It is the claim of the defendant that Abraham Sant came to the defendant Menasip Perron, and by glowing representations induced him to buy a two-thirds interest in the Northern Shingle Company, a bankrupt concern, whose stockholders were S. E. Packard, E. H. Baker, and Sant. A reading of his testimony is convincing that Perron was a man well versed in business, and a man of general intelligence, although he could not read or write. He had been in the cedar business, and it was understood, when the business of the Northern Shingle Company was purchased and the defendant company formed, that Sant was to take charge of the mill and the manufacture of shingles. This he did for some time, but then left, and gave but little further attention to the affairs of the company. In the negotiations for the purchase of the Northern Shingle Company it was. ascertained that it would require about $10,000 to pay its indebtedness, which sum was to be the price asked for a two-thirds interest, which Perron was to purchase. It is the claim of defendant that Baker, one of the owners of the old company, had purchased certain timber lands from a man named Portlance for the use of the company, at a price of $2,000, which money had been paid by him, and it was insisted that this Portlance stumpage be taken over as a condition of the sale of his stock. It is Perron’s claim that he agreed to advance this $2,000 for the company, and agreed to pay $8,900 to Packard and Baker for their interest in the old company; Sant having agreed, in order to consummate the purchase, to contribute the remaining $1,100 to make the $10,000 required. It is the complainants’ claim that the entire $10,900 went to pay for this two-thirds interest in the stock of the new corporation. Perron drew from the company out of its first receipts this sum of $2,000, which he claimed he advanced, and it is urged that this was illegally done. The commissioner so found, but the circuit judge, in reviewing this finding, sustains the contention of Perron, and held the $2,000 as an advancement and the withdrawal of that amount as proper. This conclusion is substantiated by the testimony of Perron and Mr. Cummiskey, who was the attorney who represented Perron at the reorganization. It would not be profitable to attempt to review the evidence concerning this item, but an examination of all the evidence with reference to this matter satisfies us that the conclusion and finding of the circuit judge was correct.

Camp Losses and Other Items in Dispute. The controversy which is involved in these items has necessitated a careful examination of the record and of the claims of the parties, which are elaborately and fully set forth in briefs of counsel. In such a mass of detail as is here involved it is almost an impossibility to work out an exact accounting, but we are firmly convinced that the findings of the circuit judge resulted in as fair, complete, and equitable a solution of these matters as can be made, and we have therefore concluded to adopt them as our own:

“The case abounds with bad bookkeeping. For this condition all of the parties are responsible. The books of a corporation are open to the inspection of all stockholders. 1 Cook on Corporations, § 320. It was the right and duty of complainant Sant to have examined the books, or to have had them examined, from time to time, when he visited the mill. Although he may have been negligent in this, still he was entitled to honesty and fair dealing on the part of defendant Perron, who had really become the general manager of the concern.
“At the inception of the business it was agreed on the part of complainant Sant (and when I say complainant Sant I mean Abraham Sant, who in all things acted for his wife), defendant Perron, and the corporation that the company was to buy the logs that Perron put in, and if any more were needed, they were to buy them from outsiders, and there was no agreement, either one way or the other, as to whether any camps should be run by the company. Upon this subject complainant Sant testified on page 14 of the testimony as follows:
“ ‘The only arrangement I know of was that we were to buy our logs of Mr. Perron at the going prices; that was the arrangement made at the first meeting we had.’
“This brings us to the question of the camps and the camp shortage. It may as well be stated here that when Mr. Perron became the general manager of this concern he was entitled to a reasonable compensation for his services. Not necessarily the amount charged by him, but a reasonable compensation. That was the rule applied to the Supreme Court in Miner v. Ice Co., 93 Mich. 97 [53 N. W. 218, 17 L. R. A. 412], where fraud was charged against the manager. I am satisfied that the sum charged by Mr. Perron was reasonable, and it should stand. If, however, he was to furnish the company with logs at the going prices (and there is no evidence that he charged more than the going prices), then he should assume and become responsible for the camp shortage. It cannot be that the company should pay him a salary .for his services and pay him a reasonable profit, or the going prices, and also be responsible for the camp shortages. This would make the company an insurer of Mr. Perron’s business. This would neither be just nor equitable. I have examined the evidence carefully upon this question, and am satisfied that the company should be credited and Mr. Perron charged with the camp losses or shortages to the amount of $6,739, and with interest thereon, $2,358.65, in all, $9,097.65. Upon the subject of interest charged the company I must say that I think that it was excessive. An agreement to pay more than 5 per cent, must, under our statute, be in writing. I have no doubt that in some instances Mr. Perron paid for the company more than 5 per cent., but he has not shown how much. He seems generally to have borrowed money on his own account and loaned it to the company. It is very clear that he charged the company more than 5 per cent, in all cases. An instance of this charge is the Golden purchase. Upon the evidence as it stands I think that the company should be credited, and defendant Perron charged, with an interest excess of $1,782.21, and interest thereon, $445.55, making in all $2,227.76.
“I come up to the question of the margin of men’s time. This is a subject upon which I have had a good deal of difficulty. It appears that from the year 1899 to 1906 Mr. Perron drew from the company as mill labor a sum aggregating $31,577.68. Nearly all of this was at the rate of $2 per day for each man. Here was an average margin of 30 cents per day more than Perron paid for these men. Should he be permitted to charge this excess? I think-not, in the light'of the evidence. Applying the strict rule laid down in Miner v. Ice Co., supra, it certainly would not be allowed. If we apply the more liberal rule of Walsh v. Goulden, 130 Mich. 539 [90 N. W. 406], that an agent may purchase of his principal, so long as he acts in good faith, and his principal is informed of the situation, the right to deal as here shown would not .exist, in the absence of knowledge in the corporation. Such knowledge existed in the sale of logs, as we have shown above. But where a party occupies the dual position of a representative of the corporation and an interest in the matter as a private person, the strictest rule should be applied. I think that the company should be credited and defendant Perron charged with 3/20 of this sum, amounting to $4,736.65, to which interest should be added, $1,184.16, making a sum of $5,920.81.
“Coming to the mistake of a double charge for certain logs sold by defendant Perron to the company, it is only necessary to say that the defendant’s counsel say in their brief:
“ ‘This $410.24 should he charged hack to Mr. Perron, and then the company has suffered no loss on that account.’
“The amount of such mistake is $410.24, add interest, $143.58, making the sum of $553.82. There should be credited to Mr. Perron and charged to the company the error in the Ford Rivér Lumber Company deal of $1,942.90, add interest $485.72, making a total of $2,428.62. As nearly as I am able to gather from the testimony, it appears that in 1906 the company was owing Mr. Perron upon the books $3,901.88. These are Mr. Perron’s own figures, and while he claims that the company owes him more by reason of errors, he gives no definite figures, and the amount here stated, added to the sum of $1,942.90 above credited to defendant Perron, makes the sum due him larger than is claimed by defendants’ counsel in their brief. To the above sum of $3,901.88 should be added interest $585.28, making the sum of $4,487.16. To recapitulate. There should be charged to defendant Perron camp losses or shortages, with interest, $9,097.65; excessive interest with interest, $2,227.76; margin on men’s time and interest, $5,920.81; mistake on logs and interest, $553.82. Total to be charged Perron, $17,800.04. He should be credited, by error and interest, $2,428.62, amount due him, with interest, $4,487.16, $6,915.78, balance, $10,-884.26.
“This sum of $10,884.26 shows the total assets of the company according to these figures. Under the evidence, I am quite content to let these figures stand. Much might be said of the bad bookkeeping. But I do not believe that there is such confusion as leaves the matter in utter chaos. I think that a good deal depends upon the spirit in which such an examination is entered upon. If we attempt in the spirit of fairness to get at the facts that will aid us. It is unreasonable to suppose that Mr. Perron or Mr. Meloche can, at this late day, give the particulars or circumstances of each entry, or the names of the men, or the number of teams that did .certain work. I believe that the above result is a just one. It should be borne in mind that this company suffered a fire loss, over and above the insurance collected, of from $15,000 to $25,000. If we consider the cost of repairs and Sawmill, the latter sum will be exceeded. More than its entire capital was thus wiped out of existence, a fact that seems to have been lost sight of, as it necessarily must have been, upon the basis of the commissioner’s result.
“The claim of the complainants and the conclusion of the commissioner cannot be sustained, except upon the theory that both the defendants Perron and Meloche have been guilty of the grossest fraud and perjury; that the defendant Perron contemplated the wrecking of the company, with an intention to defraud the complainants. This is really charged in the bill of complaint. This is an extreme view to take of the case. I do not believe that it is sustained by the evidence. The testimony of both Perron and Meloche is reasonable and candid, and I see no reason to disbelieve it. If believed, there is no fraud in the case. The case cannot be disposed of upon the ground of bad bookkeeping. If the charges for team work were just and true, and the amounts were properly entered, the fact that all of the details were not entered does not show them to be false. The same is true of other charges. If they were known to be just and correct at the time, as is claimed by defendant Perron and by Meloche, they remain so still, notwithstanding the lack of detail. I believe that the conduct of Perron was honest, and in the main correct. In the particulars above pointed out in which I have charged him with certain amounts, I think he was wrong in his conclusion, but not necessarily dishonest.
“Even in the overcharge for men’s work, I tbiuk that Perron believed that he was justified in making the charges. But owing, to the peculiar relation which he sustained to the company, by reason of his own individual interests, I think he was wrong in the charges. After the fire the fact that the expense of getting the material out of the river and putting it in shape for sale was large, is not at all surprising under the circumstances.
“I cannot believe that under the circumstances of the case we are justified in disposing of it on the doctrine of confusion of goods. The case should stand and be disposed of upon its merits. It is better to apply a harsh rule of accountability, as it may be said we have done in the item of margin of men’s time, and allow a large sum to be charged, based upon evidence in the case, than to try to apply the doctrine of confusion of goods, because it may be a larger result.”

Claim of A. L. Sawyer. That a minority stockholder may file a bill to force an accounting and wind up the affairs of the corporation where the officers in control refuse or neglect so to do, is well settled in this State. Miner v. Ice Co., 93 Mich. 97 (53 N. W. 218, 17 L. R. A. 412). In the instant case the directors in control are the parties charged with the wrongdoing; and, under these facts, it was unnecessary for the minority stockholder to make an effort to induce the directors in control to act. Robinson v. Motor Car Co., 170 Mich. 163 (135 N. W. 897).

The litigation instituted by the minority stockholder, and vigorously opposed by the directors in control, has resulted in the recovery of a substantial sum for the benefit of the corporation. The rule as laid down in the case of Trustees v. Greenough, 105 U. S. 527, that “one jointly interested with others in a common fund, who, in good faith, maintains the necessary litigation to save it from waste and secure its proper application, is entitled in equity to the reimbursement of his costs as between solicitor and client, either out of the fund itself, or by proportionate contributions from those who receive the benefit of the litigation,” has been. cited with approval in numerous decisions of the Federal courts. See Central Railroad, etc., Co. v. Pettus, 113. U. S. 116 (5 Sup. Ct. 387). This rule, that the costs as between solicitor and client will be paid out of a fund under the control óf a court of equity to persons who have been successful in a suit concerning it, resulting in benefit to all interested in the fund, has been applied by the Federal courts to suits brought by stockholders for the benefit of the corporation. The allowance may be made either to the complainant or to the solicitors themselves, without application by their immediate client. Meeker v. Iron Co. (C. C.), 17 Fed. 48; Wm. Firth Co. v. Cotton Mills (C. C.), 129 Fed. 141; McCourt v. Singers-Bigger, 145 Fed. 103, 76 C. C. A. 73 (7 Am. & Eng. Ann. Cas. 287); Colley v. Wolcott, 187 Fed. 595, 109 C. C. A. 425. See, also, Grant v. Lookout Mountain Co., 93 Tenn. 691 (28 S. W. 90, 27 L. R. A. 98).

It is urged that no individual interested in the corporation other than the complainants received any benefits from the result of the litigation. The corporation, however, is a legal entity, separate and distinct from its individual stockholders, and, as the trial judge properly said, the question is not, “What is the advantage or disadvantage resulting to any stockholder or stockholders from the law suit, but to the corporation itself.” The corporate assets belong to the corporation for the purposes of the corporation, and no stockholder has any right thereto until all the just claims against the corporation are paid. It seems just and equitable that the corporation should pay the reasonable expenses incurred in bringing into its treasury funds which would not have been recovered without the efforts and the litigation instituted by complainants. As to the compensation of solicitor of complainants, the contract made by them and referred to in the terms of the decree above set forth should not be binding. The complainants had no right to contract for the corporation as to the amount of these fees. The corporation should be, and only can be, held for what under the circumstances of the case are reasonable fees. In determining the amount of these allowances considerable latitude should be given the court below, as it has better means of knowing what is just and reasonable than the appellate court has, being familiar with the current charges for services of similar character in the locality. Nothing has been called, to our attention that would warrant us in finding that the amount allowed to complainants’ solicitor in the instant case is excessive or unreasonable.

Taxed Costs. In the proposed bill,of costs of complainants there is an item of $2,509.32, which is made up of the charges of the Federal Audit Co., Ltd., for services and expenses of A. B. Hulsapple, an expert accountant, secured by complainants to make an audit of the books of the defendant company. The amount allowed by the circuit judge for this item was $1,100. We know of no authority in this State which justifies the taxing of this item as legal costs. It is a well-established proposition of law that costs as between parties litigant are statutory, and were not given at the common law. These costs should be limited to such taxable costs as the statute prescribes. Booth v. McQueen, 1 Doug. (Mich.) 41; Jeffery v. Hursh, 58 Mich. 246 (25 N. W. 176, 27 N. W. 7); Goff v. Cass Circuit Judge, 152 Mich. 121 (115 N. W. 1059). However, the item might very properly have been allowed to complainants as a necessary expense of litigation, and, for the reasons given in allowing claim of solicitor for complainants, the amount of $1,100 fixed by the circuit judge will be allowed as a legitimate disbursement to complainants.

Meloche Stock. Counsel for defendants contend that the court did not have jurisdiction to make any decree or order in this cause because A. H. Meloche, who is a stockholder, was not made a party to the litigation. The record conclusively shows that he was only a nominal stockholder, and that this one share of stock owned by Meloche was given to him by the defendant Perron, so that he might be a director. He testified that he acted under orders from Perron regarding the company’s affairs. He appeared in court below during the taking of the testimony, and raised no objection to the proceeding, nor has he made any attempt to intervene. The defendants under these circumstances should be estopped from now claiming that the court has no jurisdiction to enter a decree because Meloche was not made a party defendant.

Pledgees’ Interest. Some controversy is had as to whether the stock owned by complainants is now pledged, and statements foreign to the record with reference thereto are contained in briefs of counsel. On the record as made it appears that at the time the company was formed in 1899 the stock was pledged by Sant in order to obtain a loan, but it does not appear whether the loan was ever paid and the stock released. The decree of the trial court provides, however, that the amount found due complainants shall be paid over only upon production and surrender of the certificates of stock representing the interests of complainants, which protects the interests of the pledgee in case the stock is still pledged.

With the exception of holding the item of $1,100 for services of expert accountant as a disbursement rather than as taxed costs, the decree of the court below will be affirmed, with costs to complainant.

McAlvay, C. J., and Brooke, Ostrander, Bird, and Steere, JJ., concurred. Stone and Moore, JJ., did not sit.


text:
      In re QUINN’S ESTATE.
    1. Appeal and Error — Findings op Fact — Probate Appeals.
    Findings of fact made by the trial court, on appeal from probate court, will be presumed to have been filed upon request, in the absence of a showing that no request was made.
    2. Costs — Probate Court — Attorney and Client.
    The probate court is authorized to award taxable costs, not including attorney’s fees, in proceedings before it. 3 Comp. Laws, §§11221, 11222 (5 How. Stat. [2d Ed.] §§14458,14459).
    3. Estates op Decedents — Wills—Costs—Attorney's Fees.
    Under 1 Comp. Laws, § 681 (5 How. Stat. [2d Ed.] §12129), the probate courts of this State have no authority to award to the contestants of a will, as costs, attorney’s fees incurred in contesting the probate of decedent’s alleged will.
    Error to Shiawassee; Collingwood, J., presiding.
    Submitted October 16, 1913.
    (Docket No. 51.)
    Decided March 26, 1914.
    George E. Pardee presented a petition to the probate court for the county of Shiawassee asking for the allowance out of the estate of Bridget Quinn, deceased, of the fees of several attorneys employed to sustain and to contest the probate of decedent’s will. From an order allowing the prayer of the petitioner, Gustav F. Friegel, special administrator of said estate, and Frank McCartney appealed to the circuit court which affirmed the allowance of said fees; they bring error.
    Reversed.

      Lyon & Moinet, for appellants.

      A. L. Chandler and George E. Pardee, for appellee.
   Kuhn, J.

The question involved in this case is the construction to be given the statute regarding costs in probate proceedings, being section 681, 1 Comp. Laws (5 How. Stat. [2d Ed.] §12129), which reads as follows:

“In all cases that shall be contested, either in the probate court or in the circuit court, such court may award costs to either party, in its discretion, to be paid by the other, or to be paid out of the estate which is the subject of the controversy, as justice and equity shall require.”

A petition was filed in the probate court of Shiawassee county for the allowance of the will of Bridget Quinn, deceased, and eight contestants objected to the probating of the will, alleging want of mental capacity and undue influence. The case was tried in the probate court and submitted, and, pending the decision, one of the attorneys for the contestants filed a petition, alleging that there was an estate of about $12,000, setting forth services rendered in said contest, and asked for an order that the charges of the attorneys for the contestants, amounting to $1,150, and charges of attorneys for proponents, amounting to $1,050, be paid out of the assets of the estate. After notice of hearing, the probate judge, on July 11, 1912, made an order allowing attorney’s fees at the amounts prayed for in the petition. On August 22, 1912, Gustav F. Friegel, as special administrator, and Frank McCartney, as trustee under the last will, filed a petition in the probate court for a rehearing under the statute, alleging the allowance of the attorney’s fees to be unwarranted. The court granted the rehearing, but confirmed the order made on July 11, 1912. On an appeal taken to the circuit court, the circuit judge filed an opinion sustaining the action of the judge of probate, and made the following finding:

“The probate court had authority in the matter of costs. The amount must have been within the discretion of the judge. No abuse of that discretion being shown, the order of the judge is affirmed.”

As a preliminary question, it is urged that no finding was requested by appellant, and for that reason the judgment should be affirmed. As a finding was made, it must be presumed that it was made on request, in the absence of a showing to the contrary. Delashman v. Berry, 20 Mich. 292 (4 Am. Rep. 392); Preger v. Barnett, 175 Mich. 494 (141 N. W. 587). Exception was duly taken thereto, and the first assignment of error — “that neither said probate court nor said circuit court on appeal had any authority or jurisdiction to authorize or direct the payment of said attorney’s fees or any part thereof out of the property of said estate” — presents for our consideration the construction of the statute above referred to.

The circuit judge concluded that the word “costs” in the statute meant attorney’s fees, because he was of the opinion that there were no statutory costs to be taxed in the probate court, and, in support of his conclusion, cited the cases of Waldron v. Waldron, 45 Mich. 355 (7 N. W. 894); Toms v. Williams, 41 Mich. 552 (2 N. W. 814); and Goff v. Cass Circuit Judge, 152 Mich. 125 (115 N. W. 1059). We cannot agree with the statement that there are no statutory costs to be taxed in the probate court. Probate courts are declared by statute (section 647, 1 Comp. Laws) to be courts of record. Fees of witnesses in courts of record, which constitute an important part of the taxable costs in trial courts, are fixed by section 11,221, 3 Comp. Laws (5 How. Stat. [2d Ed.] §14458), where it is provided that witnesses shall receive “for attending in any suit or proceeding pending in a court of record one dollar for each day, and fifty cents for each half day,” and, “for traveling, at the rate of ten cents per mile in coming to the place of attendance, to be estimated from the residence of such witness, if within this State, or from the boundary line of this State, which such witness passed in coming, if his residence be out of the State.”

Section 11222, 3 Comp. Laws (5 How. Stat. [2d Ed.] §14459), fixes the fees of sheriffs for subpoenaing witnesses:

“Serving a subpoena for witnesses, fifteen cents for each witness summoned, and ten cents for each mile actually traveled, in going only, but when two or more witnesses live in the same direction, traveling fees shall be charged only from the farthest.”

This is sufficient to show that there are costs that are properly taxable in probate courts, but no provision is made by statute for taxing attorney’s fees, as are taxable in the circuit courts. Under the theory of appellee, and sustained by the circuit court, the probate court has unrestricted authority to tax an unsuccessful, or even a successful, litigant, or order to be paid out of the estate in controversy attorney’s fees sufficient to cover the reasonable charges of the attorneys engaged in the litigation, without reference to the amount thereof. Is the statute in question subject to such construction? We think not. The power granted to probate courts under the statute is no broader than the power conferred upon circuit courts. This court has held in several cases that the discretion contained in this statute is limited in the circuit courts to the awarding of taxable costs. Cheever v. North, 106 Mich. 390 (64 N. W. 455, 37 L. R. A. 561, 58 Am. St. Rep. 499); Brilliant v. Wayne Circuit Judges, 110 Mich. 68 (67 N. W. 1101); Goff v. Cass Circuit Judge, 152 Mich. 121 (115 N. W. 1059).

Section 9437, 3 Comp. Laws (4 How. Stat. [2d Ed.] § 11148), provides:

“The executor or administrator shall be allowed all necessary expenses in the care, management and settlement of the estate, and for his services, such fees as the law provides, together with all extra expenses.”

It has been held by this court that, by virtue of this statute, the probate court may allow an executor or administrator the charges of an attorney or counsel when necessary services are involved in the settlement of an estate; the charges being reasonable and the liability therefor incurred by the executor or administrator. Jackson v. Leech’s Estate, 113 Mich. 391 (71 N. W. 846). But these charges are not allowed as costs, but as necessary expenses of administration. Massachusetts has a statute almost identical in language with the Michigan statute, which has received the construction of the supreme court of that State. In construing that statute, which provided that “in cases contested either before a probate court or before the supreme court of probate, costs in the discretion of the court may be awarded to either party to be paid by the other, or to either or both parties to be paid out of the estate which is the subject of the controversy, as justice and equity may require,” that court, in the case of Brown v. Corey, 134 Mass. 249, said:

“By the natural construction of this provision, the discretion applies to the power to award among the parties, and not to the thing to be awarded, which is defined as ‘costs,’ a term of frequent occurrence in our statutes, meaning legal or taxable costs, and not including counsel fees.”

This holding was affirmed in Morrill v. Wiseman, 134 Mass. 252, note.

In Toms v. Williams, supra, in a chancery proceeding for the construction of a will, it was not held, as stated in Waldron v. Waldron, supra, that the allowance of counsel fees was “the proper business of the probate court,” but this court did hold, with reference to extra compensation for the counsel representing the heirs at law, that “neither the circuit court nor this court has any jurisdiction in a case in equity to charge the estate in controversy with burdens not recognized by law,” and limited the costs to taxable costs.

In Waldron v. Waldron, which was also a proceeding in the chancery court for a construction of a will, the learned jurist, in using the language that allowance of counsel fees was for the probate court, undoubtedly had in mind the authority vested in the probate courts by section 9437, 3 Comp. Laws (4 How. Stat. [2d Ed.] §11148), above referred to, which would authorize an executor or administrator, in the administration of an estate, to engage counsel for the purpose of obtaining a construction of a will, and be allowed his reasonable charges for such services. It is clear that it was this statute that the court had in mind in Goff v. Cass Circuit Judge, supra, as the case of Jackson v. Leech’s Estate, supra, where that statute was construed, is cited where the language, “The allowance of counsel fees is for the probate court,” is used.

We are of the opinion that no such construction as is contended for by the appellees should be given the statute. The expense of an attorney’s service cannot be said to be “costs,” within the meaning of that word as used in the statute. Because of the conclusion which we have thus arrived at, it will be unnecessary to pass on the question of whether or not the petition filed by the attorney gave the probate court jurisdiction.

The judgment of the circuit court will be reversed, and that court is directed to remand the case to the probate, court, with instructions to dismiss the petition which gave rise to this litigation.

McAlvay, C. J., and Brooke, Stone, Ostrander, Bird, Moore, and Steere, JJ., concurred.