text:
    McRAE v. SLEEPER.
    1. Fraudulent Conveyances — Intent—Question oe Fact — Evidence.
    In proceedings by complainants to set aside an attachment levy on lands sold to them by the judgment debtor, 'which defendants claimed was made in fraud of creditors, where the fraudulent intent is made a question of fact by the statute (3 Comp. Laws, § 9536, 4 How. Stat. [2d'Ed.] § 11420), and the conclusion of the circuit judge that such sale was in fact fraudulent is supported by the evidence, his finding will be affirmed.
    2. Same — Equity—Actual Consideration.
    Complainants’ contention that they ought to be protected by the decree to the extent of the consideration actually paid cannot be sustained where the record shows that only part of the lands conveyed is subject to the levy, and the rest is ample security for the consideration actually paid.

      Appeal from Montmorency; Emerick, J.
    Submitted June 25, 1915.
    (Docket No. 71.)
    Decided September 28, 1915.
    Bill by George F. McRae and another against Albert E. Sleeper and others for the purpose of setting aside an execution levy on certain lands. From a decree for defendants, complainants appeal.
    Affirmed.

      Joseph H. Cobb, for complainants.

      Elmer G. Smith, for defendants.
    Creditors of one Edward D. Pendock, defendants and cross-complainants in this action, attached certain lands. Complainants, claiming to be purchasers of some of the lands attached, filed their bill of complaint for the purpose of setting aside the attachment levy. In their answer and cross-bill defendants ask to have complainants’ deed set aside as fraudulent as to creditors of Pendock. Applicable statutes are 3 Comp. Laws, §§ 9533, 9536, 9537, being 4 How. Stat. (2d Ed.) §§ 11417, 11420, 11421. A statement of the facts is given in the opinion of the circuit judge, pursuant to which a decree was entered dismissing the bill and granting defendants relief. It is claimed by complainants, appellants, that the facts should have been found otherwise, that in any event complainants should have a lien for the cash they actually paid to Pendock and for a demand owed by Pendock to complainant Kendricks, which it is claimed was released and was a part of the consideration paid by complainants for the lands. The opinion referred to is here set out;
    “In the month of March, 1913, Edward D. Pendock who then lived in the village of Atlanta, in Montmorency county, was the owner of about 2,000 acres of land in that county and some 20 village lots in said village. These lands and village lots were all the property possessed by Pendock, produced no income, and for some time he had been compelled to borrow money to pay the taxes thereon. The time to redeem from tax sales of some of the lands would soon expire, and for a man of his means he was heavily in debt. He was land poor. Under these conditions, and on- March 22, 1913, he applied to complainants to purchase his lands.
    “The complainants, resided at Alpena, where Mr. McRae kept a retail furniture store. He was also a partner with Mr. Kendricks in the sewing machine, piano, organ, and some land business. Mr. Kendricks had been engaged in the sewing machine and musical instrument business for many years, and in carrying on the same he had traveled extensively through Montmorency county, was. well acquainted generally with lands therein, and had known Mr. Pendock well since the year 1905, and had had business dealings with him since 1906. Mr. McRae did not know Mr. Pendock, nor anything in regard to his lands. He testified:
    “ T acted entirely on Mr. Kendricks’ word. My partner, Mr. Kendricks, I took his word for it. He said the timber was all on the land, and the land was worth from $15,000 to $18,000. At first Mr. Pendock asked $20,000, but in a week he dropped to $10,000 for the land, and agreed to throw the 20 village lots in Atlanta in as a “bonus.” ’
    “This proposition was accepted by complainants, and on Saturday, March 29,1913, two quitclaim deeds were executed by Mr. Pendock, covering all of his lands and the village lots, each upon the express consideration of $1, and delivered to complainants.
    “Complainants claim to have paid $10,000 for this land and these lots, as follows: They gave their two notes for $8,000. One of these notes, for $5,000, was made payable in five years, and one for $3,000, was made payable in three years, both from date. The $2,000 remaining of the purchase price they account for in this manner: There was one mortgage of $525 and another of $300 upon the land, which complainants testify they ‘assumed’; but it turned out upon further examination that they had in no manner assumed the payment of these mortgages, but had simply taken the land subject to the same, and it was further developed at the hearing herein that, at the time of the purchase, only $49 remained unpaid upon the $300 mortgage. They claim that Mr. Pendock owed Mr. Kendricks a note of $850, which was surrendered to him; also that they indorsed Mr. Pendock’s note for $100, which they used in the redemption from tax sales of the lands, and gave him $225 in cash.
    “Mr. Kendricks reached Atlanta on Monday, March 31, 1913, about 5 o’clock in the afternoon, with complainant’s two deeds, but on presenting the same for record to the register of deeds a mistake in the name of one of the grantees was discovered, so that the deeds were not in fact recorded until April 7, 1913. In the meantime, and on March 31st, a writ of attachment in the suit of McClenathan, administrator of the estate of Charles Powell, against Pendock, had been sued out of the circuit court for the county of Montmorency, and on April 1, 1913, duly levied upon a portion of the lands deeded by Pendock to complainants. And on April 2, 1913, writs of attachment in the several suits wherein Sleeper, McNair & Elliott, the Gaylord State Savings Bank, and the Lewiston Bank were respectively plaintiffs, and Pendock was defendant, in the same court, were issued, and on the same day levied upon the lands mentioned.
    “At the October term of court, these suits proceeded to judgment in favor of the respective plaintiffs for the following sums: Estate of Charles Powell, $551; Sleeper, McNair & Elliott, $550; the Gaylord State Savings Bank, '$350; and the Lewiston Bank, $250. Soon after these several writs of attachment were levied and filed of record in the registry of deeds, and before such judgments had been obtained in the suits at law,_ complainants filed their present bill against the plaintiffs in said attachment suits to quiet their title as against the lien created by such levy and filing under the provisions of section 10564, 3 Comp. Laws (section 13365, 5 How. Stat. [2d Ed.]). The defendants answered said bill of complaint and claimed that said lands had been so transferred by Mr. Pendock to complainants with the intent to hinder, delay, and defraud his. creditors, within the knowledge of complainants at the time of such transfer.
    “The question, therefore, involved for ultimate determination in this case is: Was the conveyance of the lands in question by Mr. Pendock void within the meaning and the terms of section 9533, 3 Comp. Laws (4 How. Stat. [2d Ed.] § 11417). It is not at all necessary, in order to render a conveyance void as against existing creditors of the vendor, that actual fraud should be intended, or that the vendor should intend entirely to defeat his creditors in the collection of their claims. A purpose to hinder and delay creditors is fraudulent, although the debtor may honestly intend that all his debts shall ultimately be paid. And even if a sale is made for full value, it will be void as to existing creditors, if made by the vendor with intent to hinder or delay such creditors, and the buyer has notice of such intent, or knowledge that his purchase will enable the debtor to convert his means into such shape as will prevent the creditors from reaching them.
    “ ‘Sales on long time, or in exchange for assets not readily convertible, and not subject to levy, * * * may come within the mischief of the law.’ Jordan v. White, 38 Mich. 253, 256.
    “‘Knowledge by a purchaser.of facts sufficient to put an ordinarily prudent man on inquiry (where the sale is attacked as fraudulent as to creditors) is all that is required, and participation in the fraud is not necessary.’ Eureka Iron, etc., Works v. Bresnahan, 66 Mich. 489, 491 (33 N. W. 834).
    “ ‘A fraudulent intent on the part of Pier & Wagley [vendors] and notice or knowledge of such intent on the part of Sough & Wagley [vendees], is sufficient to avoid the sale, without any proof whatever of actual fraudulent intent on the part of these latter parties.’ And ‘knowledge of facts sufficient to put an ordinarily prudent man on inquiry is all that is required.’ Hough v. Dickinson, 58 Mich. 89, 94 (24 N. W. 809).
    “ ‘It is enough that the purchaser knows what would put a prudent man on inquiry as to the motive of the sale.’ Bedford v. Penny, 58 Mich. 424, 428 (25 N. W. 381).
    “Such is the settled and well-known law of the State. I have no doubt that Mr. Kendricks knew that Pen-dock, in making the deeds, fully intended to hinder and delay his creditors in the collection of their debts, and that such must be the necessary and inevitable consequence of the conveyances made upon such an unusual consideration as that asserted in this case. Pie was an intimate of Pendock for years around Powell’s Hotel, where Pendock had lived until he owed $500 for board, and Kendricks knew he was disputing with Powell the amount of this bill and could not pay it. He was associated in some business dealings with him for a series of years, and until, as he says. Pen-dock owed him $850, loaned in small sums, which he could not pay.
    “Mr. Kendricks testified:
    “ ‘I Lave known Mr. Pendock ever since along about 1905. He was living at Charles Powell’s when I first got acquainted with him. Indirectly, I have bad some money invested that Pendock bas bandied, small quantities, nothing more than through letting him have some money to handle — to use. About a week before we bought, Mr. Pendock first spoke to me about it. I made no investigation about the timber, except what I took for granted, knowing Pendock as long as I had.
    “ ‘Q. Did you have any knowledge at this time of Mr. Pen-dock’s indebtedness to people?
    “ ‘A. Why, yes; I had some idea that he owed some people; but as to what amount, or to who, I didn’t. Pendock told me that he owed the Powell estate some money, but not near what they claimed, and he told me that he had a few other debts; but I knew nothing of the amounts. * * * I won’t be positive whether he said he owed the bank, in Hillman a little, or the bank in Atlanta a little, or whether he didn’t. I don’t pay much attention to those things; but he told me he owed a little money.. Pendock has had money of me in small amounts since 1906 at different times. The first money I gave him in 1906 over here at Powell’s to buy a piece of land that he wanted to buy; at that time Powell and I was doing business together as usual up to the time of his death. Pendock and I settled up, and I took the $850 note for the account. The note was dated in 1909.’
    “Mr. Elliott testified that, in a conversation which he had with Mr. Kendricks on April 1st, ‘he told me he was aware of the fact that we had a claim against Pendock. He said that Pendock told him he owed us $500, he owed the Lewiston Bank $350, and that Powell had a claim against him of $500, but he didn’t owe him near that much, and the Bank of Gaylord, also, had a claim.’ And I believe this statement of Mr. Elliott. I have no doubt that Mr. Kendricks knew far more of the actual financial condition of Pendock than he is willing to or does admit. I believe he knew all about it, and surely he knew enough to have put any prudent, honest man upon inquiry, which is all the law requires.
    “And Mr. McRae is affected with and held to the knowledge possessed by Kendricks in making this purchase. They both swear they were partners in this transaction, as well as in their general business of selling sewing machines and musical instruments, and dealing .in lands, and no doubt such was the fact. And h.e knew, as he testified, that Pendock was making a '‘sacrifice’; that he was selling his land for one-half .its value, nominally, but actually for much less. Every fact and circumstance concerning the making of the sale by Pendock to complainants go to show a deliberate and desperate intent upon the part of Pendock to hinder, delay, and defraud his creditors, and, as well, knowledge of such intent by complainants. They knew his necessities, and his poverty so far as funds were concerned.
    “He first asked $20,000 for lands which they fully believed to be worth $15,000 to $18,000. In a week he dropped to $10,000 for the lands alone, and gave the 20 village lots as a ‘bonus.’ For $8,000 of the consideration he accepted a note signed by complainants for $5,000, payable in five years, and another note for $3,000, due in three years. He took no mortgage or other security. He had pressing debts at the time and complainants knew it. By this transaction, 88 per cent, and more of his assets, besides the village lots, was absolutely destroyed so far as his creditors were concerned. And then Pendock disappeared and has not been heard from since. Mr. Kendricks is scarcely collectible for any amount, and Mr. McRae is a man of very limited means.
    “These notes of complainants, in my opinion, could not be sold in the city of Alpena on ample notice for $500. The sale of such an amount of land upon such a long credit, without taking back a mortgage or other security, is an unheard-of and unprecedented transaction in this region. I never knew of one such before. It is an asserted sale, which, as against creditors, ought not to be permitted to stand, either at law or in equity.

      “ ‘There are circumstances so frequently attending conveyances and transfers intended to hinder, delay, and defraud creditors that they are denominated badges of fraud. These badges of fraud do not in themselves, or per se, constitute, fraud, but are rather signs or indicia- from which its existence may be properly inferred as matter of evidence. They are more or less strong or weak, according to their nature and the number concurring in the same case. They are as infinite in number and form as are the resources and versatility of human artifice.’ 20 Cyc. pp. 439, 440.
    “The well-known writer of the article of Fraudulent Conveyances then proceeds to state many ‘particular badges/ and among others:
    “ ‘6. Sales on Credit. — The mere fact that a sale is made upon credit does not require that the transaction should be declared invalid; but a sale upon credit of part of his property by an insolvent debtor is a circumstance which may be considered, with others, as hearing upon the question of fraudulent intent; and an unusual length of credit is a badge of fraud. So, too, the giving of long time credit to an irresponsible purchaser without security has been considered to be a badge of fraud.
    “ ‘7. Insolvency or Indebtedness of Debtor. — Evidence of large indebtedness, or of complete insolvency, is an important element in marshaling badges of fraud to overturn fraudulent transfers; but mere indebtedness of the grantor at the time of making a conveyance is not generally of itself such evidence of fraud as will avoid a conveyance, although it is voluntary.
    “ ‘8. Transfer of All the Debtor’s Property. — The transfer of all or nearly all of his property by a debtor, especially when he is insolvent or greatly embarrassed financially, is a badge of fraud.’ 20 Cyc. pp. 448, 449.
    “If the $850 note were an actual, honest indebtedness from Pendock to Kendricks, it should be protected in any decree which may be settled herein, unless the complainants had knowledge of Pendock’s fraudulent intention, or grounds for reasonable suspicion, which, in this case, I hold that they had.
    “‘If a creditor purchases more than enough property to páy his debt, although he pays a consideration for the remainder, the sale will not be upheld, unless it was made under such circumstances as would validate it if made to any other purchaser; that is, unless he has no knowledge of the seller’s fraudulent intention, nor grounds for reasonable suspicion. If tbe sale is for an amount in excess of tbe debt, with the purpose on the part of the debtor to place the excess beyond the reach of other creditors, it is void, if the creditor knew of that purpose, or intended to aid the seller in secreting a part of his property from his creditors.’ 20 Cyc. pp. 478, 479.
    See, also, Gumberg v. Truesch, 110 Mich. 451, 458, 454 (68 N. W. 236); Scandinavian Society v. Lindquist, 133 Mich. 91 (94 N. W. 592).
    “My conclusion is the bill should be dismissed and a decree settled accordingly.”
    To the facts thus stated should be added that none of the lands attached were appraised as high as $5 an acre. No proof was introduced by defendants concerning the value of the property, and there is no testimony upon the subject, except the value of them claimed by Pendock, the sum complainants claimed to have paid, or agreed to pay, for them, and the appraisal. The value of property owned by Pendock, other than that conveyed to complainants, does not affirmatively appear.
    Certain statements of fact found in the opinion are challenged as not supported by testimony. They are:
    “These lands and village lots were all the property possessed by Pendock, produced no income, and for some time he had been compelled to borrow money to pay the taxes thereon. The time to redeem from tax sales of some of the lands would soon expire, and for a man of his means he was heavily in debt. He was land poor.”
    “These notes of complainants, in my opinion, could not be sold in the city of Alpena on ample notice for $500. The sale of such an amount of land, upon such a long credit, without taking back a mortgage or other security, is an unheard-of and unprecedented transaction in this region. I never knew of one such before.”
    Defendants levied the attachment upon five parcels of land not conveyed by Pendock to complainants.
   Ostrander, J.

(after stating the facts). The question of fraudulent intent is made by the statute a question of fact, and not of law. Assuming that the commercial desirability or discount value of the notes given by complainants is not made to appear, and that there is no evidence of inadequacy of the price complainants agreed to pay for the lands, and dismissing these considerations as in any manner controlling decision, I am impressed, after a careful reading of the testimony, that it and the natural and necessary inferences which are to be drawn from it support the conclusion of the trial court. It may be truthfully said that the opinion delivered does not state some facts which counsel for complainants thinks qualify and make less bald and positive some of the findings. But it was for the court to draw inferences from the testimony, and I think he did not err in drawing the final and conclusive one that the transaction between complainants and Pen-dock was not bona fide.

As to complainants’ contention that they ought to be protected by the decree to the extent of the consideration they actually paid, it may be answered by saying that their deed conveys to them the Pendock title to lands not levied upon by defendants. It is only as to the defendant creditors that the conveyance is held to be bad. I find nothing in the record affording the information that complainants are not amply secured for the consideration actually paid by them.

The decree is affirmed.

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

The late Justice McAlvay took no part in this decision.


source: Caselaw Access Project

author: Ostrander, J.

license: Public Domain

text:
    SCHOOL OF APPLIED ART v. BUCKLEY.
    1. Release — Corporations — Misappropriation of Funds — Official Act.
    Where there was dissatisfaction with defendant’s management of the affairs of a corporation of which he was secretary, treasurer, and manager, and a tripartite agreement was signed by the parties in interest settling their affair's and releasing defendant, who was withdrawing from the business, from all claims of every nature against him on account of any official acts, misappropriation of funds which he had paid to himself as salary in addition to his fixed salary, not disclosed to complainant at the time the release was signed, although an examination of the books would have disclosed it, was not an official act included in the release.
    2. Same — Fraudulent Issue of Stock.
    But the fraudulent issue of corporate stock by defendant, who appropriated the proceeds to his own use, was an official act from the liability for which the agreement released him.
    Appeal from Calhoun; North, J.
    Submitted June 28, 1915.
    (Docket No. 19.)
    Decided September 28, 1915.
    Bill by the School of Applied Art, a corporation, against Claude W. Buckley for an accounting and for other relief. From a decree for defendant, complainant appeals.
    Reversed and decree entered in this court.

      Burritt Hamilton and Stewart & Jacobs, for complainant.

      John W. Bailey and Howard W. Cavanagh, for defendant.
   Ostrander, J.

Complainant corporation seeks in this suit an accounting with defendant, who was for more than five years a director, secretary, treasurer, and manager of the corporation, from November 4, 1905, to March 1, 1911. It is said in defendant’s brief that he did all of the work, from licking stamps to managing the business. The books, except as kept by defendant, were kept by inexperienced girls, receiving $5 or $6 a week. In April, 1911, an accountant was employed by complainant, and after spending some time preparing forms for a new system of bookkeeping began the collection of data for opening the new set of books. It is charged that he found irregularities in defendant’s conduct of the business, and they are made the subject of this suit. A hearing, which we are told lasted three weeks,-was concluded by a decree dismissing the bill of complaint.

The settled case, certified to contain the substance of “all the evidence in this cause,” makes a printed record of nearly 1,100 pages, and counsel for defendant say, in the brief, that matter which it was understood and promised the trial judge should be incorporated is not contained therein. An omitted exhibit and the opinion delivered by the trial judge are printed in defendant’s brief. Counsel for defendant have bitterly attacked one of the counsel for complainant, and this has. led to reply. So far as the items of complainant’s demand which are urged here are concerned, we discover in the record no evidence of any conduct of complainant’s counsel which excuses defendant, or which can be characterized as reprehensible or unprofessional. The opinion of the trial court contains no analysis of the testimony, and no specific findings of fact based upon the testimony, for the reason, we assume, that in the opinion of the court the complainant, through its officers, is chargeable with notice of most of the matters now complained about, and acted after notice, or after being chargeable with notice, in a manner to waive the right to pursue defendant with respect to them, or, by a certain release, expressly waived such right.

We think it apparent, both from the opinion of the court and from the decree entered, that an application was made of the doctrine of estoppel, and a construction given to a written instrument, which cannot be sustained. We shall assume that the trial court would have found the facts to be as we find them to be, since most of them are sustained by defendant’s testimony. The specifications of complainant’s demand which are most relied upon, and to which we shall give attention are:

“(1) $1,646.88 for capital stock of the par value of $2,256 which the defendant converted and sold for his own use.
“(2) $30, cash which the defendant took from the company in connection with this stock transaction.
(3) $38.50, cash taken by the defendant as interest, likewise forming a part of the above stock transaction.
“ (4) $181, cash taken by the defendant in payment of overtime which he claims to have put in for complainant company.
“ (5) $857.35, cash taken by the defendant as salary (not including overtime charges) over and above the amount to which he was entitled.”

A brief history of the corporation must be given. In giving it, we state what we find from the record to be the facts. It was incorporated November 4, 1905, with an authorized capital of $3,500, 350 shares of stock, at $10 each. On November 15, 1905, the total capital stock was issued in 5 certificates, certificate No. 1 to defendant for 86 shares, certificate No. 2 to defendant for 163 shares, certificate No. 3 to Cora O. Pilsworth for 99 shares, certificate No. 4 to Edward S. Pilsworth for 1 share, certificate No. 5 to Queen H. Buckley for 1 share. Meetings of directors and of stockholders were infrequently held. There had been a pre-existing organization of the same name, the property of which was acquired by defendant through foreclosure of a chattel mortgage, who transferred it to complainant in payment for stock. The plan was to give Mr. Pilsworth (president) and wife 100 shares of stock, and defendant and his wife 100 shares. Of the remaining 150 shares, defendant was to have sufficient, at par, to pay him for his investment. The sum was computed at $644.30, and he received 64 shares. This gave him, in all, 164 shares, 1 of which he gave his wife, retaining 163. It left 86 shares, which were issued to defendant, and by him transferred to the corporation, to be sold as treasury stock. He was authorized to sell it at $5 per share, and some was sold at this price.

Under date April 10, 1907, defendant entered upon the books a charge in his favor of $430, which he says was for this 86 shares of stock at $5 a share, and issued to himself, the president also signing the certificate, 40 shares, of the par value of $400. In November, 1908, he entered a charge in his favor of $35.50, as interest on this $430. The odd $30 he drew out in cash. As the entries were made, defendant charged the stock against his labor account. This entry was erased, or crossed off, and it was charged against his cash account. It was upon the trial that he accounted for the transaction as a payment for 86 shares of stock, which he contends was his own, but transferred to the company for its convenience. In December, 1910, the capital stock was increased from $3,500 to $50,000, all of which was issued, and a bond issue of $25,000 was authorized.

Defendant had a fixed weekly salary. He paid himself $181 for overtime. No corporate action sanctioned it. The fact was actually discovered after defendant had retired from the company. Defendant paid himself salary in excess, of the amount fixed and agreed upon. The overcharge is $857.35. The fact is not disputed. It was discovered after he retired from the company.

There was friction and dissatisfaction with defendant’s management of affairs. An agreement, reduced to writing, was made February 27, 1911, between defendant, George W. Buckley, his father, and Minnie M. Buckley, parties of the first part, Burritt Hamilton, who was a director of complainant and its counsel, party of the second part, and the complainant, party of the third part, one of the purposes of which w’as the sale and the purchase by others than the complainant of the stock of the parties of the first part for $15,000, of which $10,000 was to be paid in cash and $5,000 in mortgage bonds of the complainant. The agreement was executed. It contained the following provision:

“(c) That, after consummation of said sale of stock, this instrument shall operate as a release and discharge of all claims, if any, of every name, nature, and description whatsoever, however arising, then held by said Claude W. Buckley, against said third party, except claims arising by virtue of his ownership of bonds of said third party, and except such sums as may be found due him upon an accounting for goods, wares, and merchandise sold to said third party by the Buckley Office Outfitting Company; and this instrument shall operate in' like manner as a releasé of aü claims, if any, of every name, nature, and description whatsoever, then held by said third party against said Claude W. Buckley on account of any official acts of said Claude W. Buckley as an officer of said school, it being the intent hereof that this instrument shall operate and stand as a mutual acknowledgment of satisfaction and discharge of all such matters.”

Under date July 1, 1909, certain contracts called twin service contracts were entered into between complainant and defendant and between complainant and its president, Edward S. Pilsworth. From the beginning defendant and his family had had a controlling interest in the company. By these agreements it was sought to increase and to make equal the holdings of stock of the president and of defendant, neither to pay for the additional stock in cash but both to earn it by services to be rendered. They and their families owned, practically, the entire stock of the corporation. This agreed upon adjustment was based in part upon the fact that defendant owned the 40 shares of stock which had been wrongfully, and we find fraudulently, issued to him. The agreement, as made and executed, assumed that defendant owned a certain number of shares, including the said 40 shares, and an equal amount was given to Pilsworth, the president, and so far as appears has been since owned and controlled by him. The 40 shares of stock which defendant acquired in the manner hereinbefore described grew, by stock dividends, from $400 par value to. $2,256 par value, and defendant, pursuant to the agreement referred to, sold it, with the remainder of his holdings; its proportionate part of the selling price being $1,-646.88.

There is, of course, very much more concerning the dealings of the interested parties and the history of the corporation than has been stated. A Considerable portion of the testimony relates to the various complaints about defendant’s official and business conduct and the causes of friction between defendant and other interested parties. The reason given for entering upon this subject is that it explains what was intended to be settled by clause (c) of the tripartite agreement. We have no occasion to set out the testimony. It is sufficient to say that the agreement, in the light of the testimony, cannot be interpreted so as to include in the release claims for money which the defendant appropriated without authority, without advising his associates, and without their knowledge. The language employed in subdivision (c) of the tripartite agreement cannot be reasonably interpreted as defendant now seeks to interpret it. Usually a demand of which parties are ignorant is not embraced in a release. It is the general rule that misappropriation of corporate assets by an officer cannot be authorized or ratified. It is true that the method of bookkeeping was unscientific, making mistakes possible, if not probable. But there is no question of mistake in the act of defendant in taking money for overtime while drawing a fixed salary; none in his drawing $800 more than he was entitled to draw. These were not official acts of defendant, but were peculations of which he does not appear to have been even suspected. The fact that the sums taken were charged to him, and that the other interested parties might have caused an examination of the books to be made before entering into the tripartite agreement, do not aid defendant. He cannot complain because the other contracting parties assumed that he had been honest in the matter of drawing his salary. There was no adversary proceeding, but a mutual settlement, in which, in fact, the honesty of defendant’s private account was assumed by all the others; its dishonesty known to himself.

It appears, then, that while he had access to the complainant’s funds defendant wrongfully appropriated $938.35 which belonged to the corporation. He settled with and withdrew from the corporation without disclosing this fact. It was later discovered by complainant. We find no good reason for denying to complainant a decree for this sum, with interest from March 1, 1911.

Complainant’s right to recover the value, and the value of the increment, of the fraudulently issued 40 shares of stock, or to recover what defendant received for it, présents a question of greater difficulty. The corporation is .not seeking to cancel the certificate of stock, but it proceeds upon the theory that the 40 shares of stock—

“remained, in equity, the property of complainant. Their increase by way of stock dividends was also complainant’s property. * * * As an agent he is bound to account for this.”

The act of issuing stock of a corporation is an official act. As was said by Campbell, C. J., in Hempfling v. Burr, 59 Mich. 294 (26 N. W. 496) :

“It is quite likely that Burr’s conduct may have been official, but we are not aware of any principle which will exempt a person from personal responsibility for fraud committed in a double capacity. It is no part of official duty to commit fraud, and there are probably cases where a corporation may not be liable for the frauds of its officers.”

It is the general rule, relied upon by complainant, that an agent is bound to account to his principal for all money and property which may come into his hands by virtue of the agency, and this rule embraces, not only such money and property as may be received directly from the principal, but also that which comes into the agent’s hands for the principal as the result of the agency. 1 Mechem on Agency (2d Ed.), § 1327. The manager, secretary, and treasurer of a private corporation is, of course, an agent of the corporation. But an official act of his, although in his own interest, differs in.some respects from a mere peculation; for example, a taking of money to which he had access by reason of his agency. Subdivision (c) of the tripartite agreement was drawn by a lawyer. The words, “on account of any official acts of said Claude W. Buckley as an officer of said school,” must be held to mean something. No particular acts are described or defined. What was the reason for the release, unless it was suspected, or believed, or thought possible, that defendant had officially performed some act for which he might be personally answerable to the corporation ? The corporation did not, in fact, know about the fraudulent issue of the 40 shares of stock; but it did not limit its release other than by use of the general term. From the consequences of proper official conduct no release was required. We feel constrained to deny to complainant any recovery on account of the issue of stock and on account of the details which were a part of the transaction. The unexcused, and inexcusable, laches of officers of the corporation in not knowing for what consideration its stock was issued, while it is not made the ground of decision, made the loss which has occurred possible. This fact may, or may not, help the defrauded complainant to support with some equanimity a conclusion which is rested upon the contract which it made.

The decree is reversed, and a decree may be entered in this court in conformity with this opinion. Appellant will recover costs of this appeal.

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

The late Justice McAlvay took no part in this decision.


author: Stone, J.

text:
    CORNELL v. NORTON.
    1. Vendor and Purchaser — Taxation—State Tax Deed.
    The vendee in a land contract was, justified in paying the taxes which it was the duty of the vendor to pay, where the same appeared to be a lien upon the land, although the tax sale and deed issued to him thereunder were void.
    2. Same — Forfeiture—Redemption—Equity.
    Complainant purchased 160 acres on a land contract, agreeing to pay therefor $400 in annual instalments of $100 each, with interest. Defendant agreed to convey the land by warranty deed subject to all taxes assessed for and after 1895. The contract provided that on failure of the vendee to perform, the vendor might elect to be discharged from his covenants and forfeit the payments and all improvements made. Complainant made valuable improvements, but failed to pay any part of the purchase price. He acquired a tax deed from the State for the taxes of 1894, which it was defendant’s duty to pay, and claimed to own the premises thereunder on advice of eminent counsel, although said deed is now admitted to be void. Defendant, after waiting for 11 years, declared the contract forfeited and brought ejectment, and complainant seeks to restrain the suit at law and to be allowed to redeem from the forfeiture. Held, that the decree of the court below allowing the complainant to redeem by paying the purchase price, with interest, together with the taxable costs of the ejectment suit and costs of this suit, less the amount of the taxes of 189’4, with interest, should be modified to include an allowance of $50 beyond the taxable costs in the ejectment suit.
    Appeal from Ontonagon; O’Brien, J., presiding.
    Submitted June 22, 1915.
    (Docket No. 109.)
    Decided September 28, 1915.
    Bill by Albert S. Cornell against Denis J. Norton to redeem from the attempted forfeiture of a land contract and to enjoin the prosecution of an action of ejectment. From a decree for complainant, defendant appeals.
    Modified and decree entered in this court.

      Walter G. Van Slyck (John A. Brooks, of counsel), for complainant.

      John Jones, for defendant.
   Stone, J.

The bill in this cause was filed to redeem from the attempted forfeiture of a land contract, and to enjoin the prosecution of an action of ejectment. On October 26, 1895, complainant and his son, Bernard H. Cornell, and the former’s brother, Edwin E. Cornell, entered into a written contract with defendant, whereby the latter agreed to sell to them 160 acres of land in Ontonagon county for the sum of $400, payable in annual installments of $100 each, beginning June 1, 1897, with interest payable annually on all sums unpaid, upon the performance of which conditions defendant agreed to convey the land to them by warranty deed, subject to all taxes assessed for and after 1895. The contract further provided that:

“On the failure and neglect of said parties of the second part to do or perform anything herein specified to be done and performed on their part, the said party of the first part may elect to consider himself released and discharged of and from any and all liability in any of the covenants specified to be done and performed on his part, and all payments and improvements made by the said parties of the second part shall be deemed forfeited without further notice, as stipulated damages for nonperformance of contract.”

On May 25, 1897, defendant, by writing indorsed on the contract, extended the time for the first payment until June 1, 1898. No part of the purchase price has ever been paid. Complainant went into possession under the contract, a,nd has been in possession ever since. During this time he has cleared a part of the land, erected buildings thereon, and paid the taxes. The value of his improvements is variously estimated. The circuit judge, who heard the testimony, found that they were worth $1,500. At the date of the contract the land was what is known as “stump land,” and, while there is some conflict in the testimony, it appears that $400 was a fair value of the property at that time. It has increased in value since.

On September 24, 1903, Edwin E. Cornell quit-claimed his interest in the land to complainant, and on September 6, 1910, Bernard H. Cornell assigned to complainant all of his interest in the contract. On December 4, 1897, complainant and Edwin E. Cornell, having learned that the land in question had been sold to the State for the taxes of 1894 (taxes which it was the duty of defendant to pay, by the terms of the contract), purchased the rights of the State under such tax sale, and, the redemption having expired on November 2, 1898, they received from the auditor general the usual State tax land deed. The consideration for this purchase was the sum of $12.02. On April 25, 1898, complainant and Edwin E. Cornell caused to be served upon defendant, as the grantee in the last recorded deed to said premises, a notice of such purchase, and of defendant’s right to redeem within six months, proof of which service was filed with the county clerk. Under the evidence this notice, the deed and the tax sale were void, but that was not known by the parties at the time, and the fact is not very material here. On April 30, 1898, complainant caused a letter to be written to defendant, stating that he had bought the State bid for the 1894 tax, and had caused the sheriff to serve notice of the fact, “as we are required to do by law, as we understand the law.” The letter further stated:

“We bought the tax bid ,to protect ourselves, not with the expectation of getting the place on a tax title. Nor do we expect you to pay more than the original tax.”

Within a few days after the expiration of the six months’ notice defendant tendered to complainant an amount supposed to have been sufficient to redeem from the tax deed, which complainant refused to accept, claiming that it came too late, and that he was then the owner of the land. Complainant claims, however, that this tender was accompanied by a demand that he execute a quitclaim deed of the premises, but this is denied by the defendant. As above stated, the complainant has ever since remained in possession of the premises, cultivating and improving the same in the belief and under the claim, until about the time of the hearing, that he owned the same. During all of this time defendant resided in the immediate neighborhood, meeting complainant frequently, and the latter testified that defendant never made any demand upon him for the payment of the purchase price of the premises. Defendant denied this, and testified that he did demand payment, but fixed no time or place of such demand.

In the early part of 1899 complainant submitted the question of his rights under this contract and tax title to able counsel, and was advised in letters, which appear in the record, that as complainant was under no obligation under the Michigan decisions to pay the tax of 1894, there was nothing to preclude him from purchasing said tax title; that, if the tax title was valid and regular, he could hold the land; that any attack upon its validity would have to be made before complainant had been in possession for five years; and that, if it should eventually be held bad, complainant would still be entitled to pay up the amount due on his land contract, and obtain his deed. Matters ran along in this condition until on or about May 16, 1910, when defendant served on complainant a notice, of which the following is a copy:

“To Albert S. Cornell and Bernard H. Cornell:
“Please to take notice that by reason of the failure on your part to perform the covenants and agreements by you to be performed under the provisions of a certain agreement in writing entered into the twenty-sixth day of October, A. D. 1895, by and between the undersigned, as party of the first part, and Albert S. Cornell, Edward E. Cornell, and Bernard H. Cornell, parties of the second part, wherein the undersigned did agree to convey to the above-mentioned Albert S. Cornell, Edward E. Cornell, and Bernard H. Cornell the following described real estate, viz., all that certain piece or parcel of land situate and being in the township of McMillan, in the county of Ontonagon, and State of Michigan, and described as the northwest quarter of section thirty-five (35), in township forty-eight (48) north, of range forty (40) west, in that you have utterly failed, neglected, and refused to pay to the undersigned any part of the purchase price of said described land as provided in said agreement, and have utterly failed, neglected, and refused to pay to the undersigned any of the interest upon said purchase price, the undersigned has elected to consider himself released and discharged of and from any and all liability on any of the covenants specified to be done and performed on his part, and the undersigned does hereby elect to consider himself so released and discharged, and the undersigned does hereby declare the said agreement and all of your rights thereunder forfeited by you for the reasons above set forth and for the reason that you have failed and refused to fulfill and perform the agreements which by the terms of said agreement were to be fulfilled and performed by you.
“And you will also please take notice that you are hereby required to quit, surrender, and deliver up possession to me of the premises hereinbefore described, which you now hold of me as my tenant, on or before the 20th day of August, A. D. 1910, for the reason that I intend to terminate your tenancy and repossess myself of such premises on the date above mentioned.
“Dated this 16th day of May, A. D. 1910.
“Denis J. Norton.”

In September following defendant commenced an action of ejectment against complainant and Bernard H. Cornell in- the circuit court, whereupon this bill was filed to restrain the prosecution of such suit, setting up, in addition to the foregoing facts, that complainant’s possession under his tax deed had been open, notorious, and adverse for a period sufficient to give him title by adverse possession under the statute, and asking that his title be quieted as against defendant, or, in lieu of such relief, that the attempted forfeiture of the land contract be set aside, and complainant permitted to redeem therefrom upon such terms as should be just and equitable, and also praying for general relief.

By the record it was conceded by defendant’s counsel that between the time of the service of the attempted forfeiture notice, and the filing of the bill of complaint there was no unreasonable delay. Defendant first demurred to the bill, which was overruled. Later defendant answered, denying the claimed equities and allegations of the bill. The case, being at issue, was heard upon testimony taken in open court. A decree was entered permitting complainant to redeem from the forfeiture by paying to defendant, within 60 days from the date of the decree, or, in case of an appeal by defendant, within 60 days after the affirmance of the decree in this court, the full amount of the purchase price, with interest, together with the costs of the ejectment suit, and of this suit, less the amount of the taxes of 1894, with interest, in default of which payment defendant should be entitled to a decree dismissing the bill. From this decree defendant has appealed.

Although at the time the bill of complaint was filed complainant was claiming to own the land by virtue of his tax deed, at the hearing it appears that he testified that he was then willing and anxious to pay the principal sum of the contract, with interest, less the taxes of 1894, and interest.

While the tax sale and deed were void, the tax appeared to be a lien upon the land and the complainant was justified in paying it. After the service of the notice of forfeiture, it is established by the evidence that there were some negotiations between the parties, and the complainant offered to pay $300 in settlement, but this offer was refused by defendant.

In the written opinion of the learned circuit judge he said:

“It is the claim of the complainant that there will be no injustice upon the defendant if the complainant is permitted to redeem from the forfeiture of the contract by paying the amount due under its terms, together with the legal interest thereon. In reply to this claim of the complainant, the defendant contends in his answer that all of the rights of the complainant in the land contract should be forfeited; that there has been a legal and valid notice of forfeiture served upon the complainant and other vendees. The. defendant contends that the complainant has placed himself in such a position by his long claim of ownership under the tax title, and by his insistence upon said claim in his bill of complaint, and by his failure to make any effort to comply with the terms of the contract, and by his complete and unequivocal repudiation of all of his obligations under the contract, as 'well as by his surreptitiously endeavoring to acquire a title adverse to his vendor, he could have no standing in a court of equity, and that to suspend and enjoin the legal right and remedy of the defendant to proceed with his ejectment case and relieve the complainant from the effects of the forfeiture of the contract, the complainant should come_ into court showing some special and significant equities, and that in this case it cannot be said that the complainant has any equitable standing at all, but, on the contrary, by his actions and attitude places himself entirely beyond relief in a court of equity. On the other hand, the complainant claims that the defendant, by serving a notice of forfeiture upon the complainant, recognized the interest of complainant in the land contract; that, as a matter of fact, the defendant has not been in any way injured by any act of the complainant; and that, if the defendant should be paid the full amount of the purchase price, together with interest thereon, he will not suffer any wrong or injustice.
“I am of the opinion that the complainant should be permitted to redeem. He has made substantial improvements upon the land to the knowledge of and without any interference upon the part of the defendant. While the complainant was undoubtedly guilty of reprehensible conduct in purchasing the State bid and acquiring the tax deed thereon, and afterwards pretending to the defendant that he did not intend to acquire the title to the land against the defendant’s rights, but simply to protect both of them, yet it cannot be said that this conduct of the complainant has in any way injured the defendant. At the expiration of the six months after the tax notice was served upon him the defendant knew "that the complainant pretended to claim the premises under the tax deed; yet the former took no steps to disturb the complainant in his possession of the premises for the period of eleven years thereafter. Under the circumstances, I cannot see that the maxim the ‘one who comes into equity must come with clean hands’ should have any application to this case. The complainant, in claiming the land during all of those years under his so-called tax title, acted in pursuance of the advice of a reputable and distinguished lawyer. To defeat the complainant now would, in effect, be to forfeit all of his improvements and the taxes' that he has paid ever since he entered into possession of the land. The maxims of equity should not be permitted to harden into rigid and formal doctrines. If equity is to work substantial justice, it must remain free and plastic, within reasonable limits. Equity will not render aid in enforcing a forfeiture, but will interpose to relieve from them” — ■ citing cases.

We are of the opinion that the conclusion of the court below finds support in the following cases in this court: Stickney v. Parmenter, 35 Mich. 237; Hodges v. Buell, 134 Mich. 162 (95 N. W. 1078); John v. McNeal, 167 Mich. 148 (132 N. W. 508).

However, as complainant is seeking relief against a forfeiture, he should pay sufficient to make the defendant whole. Defendant had brought a suit in ejectment. He was allowed in the court below the taxable costs only, in that case. Considering all the circumstances, we think an allowance of $50 beyond the taxable costs in the ejectment suit should be allowed and paid to defendant, and the decree will so provide. In all other respects the decree of the circuit court is affirmed.

We think that neither party has any claim to costs in this court, and none will be awarded.

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

The late Justice McAlvay took no part in this decision.


text:
    MESLER v. JACKSON CIRCUIT JUDGE.
    1. Mandamus — Order of Court — Motion to Set Aside — Practice.
    Mandamus will not lie to compel a circuit judge to vacate an order unless application for such relief has first been made to him.
    2. Divorce — Alimony—Agreement Between Husband and Wife —Contempt.
    A sum awarded to the wife by the court, on granting her a divorce, in pursuance of an agreement between the husband and wife, after their separation, whereby he was to pay her a certain sum monthly, and intended for her support and maintenance out of her husband’s estate, is alimony; the payment of which may be enforced by contempt proceedings.
    3. Same — Permanent Alimony — Division of Property.
    “Permanent alimony” is a provision for the support and maintenance of a wife out of her husband’s estate during her lifetime, ordered by a court on decreeing a divorce; “alimony” being essentially a different thing from a division of property of the parties.
    4. Same — Jurisdiction—Equity—Pleading.
    The equity court has jurisdiction, in an action for divorce, where the petition contains a prayer for general relief, to adjust and settle the rights of the parties with respect to the nature and amount of the alimony, and, in doing so, to confirm any agreement of the parties that is just and reasonable, and not the result of fraud and coercion.
    •’5. Same — Contempt—Statutes.
    Act No. 280, Pub. Acts 1899, authorizes contempt proceedings in divorce cases.
    J>. Same — Alimony—Personal Decree — Interest in Property.
    An- award of alimony ordering defendant to pay a certain sum monthly is a personal decree, and not necessarily an interest in property, and is not in conflict with the underwriting on the subpoena served on defendant in the divorce suit, reciting that a personal decree was sought against him and that the bill was not filed to reach interests in property.
    Mandamus by Arthur M. Mesler against James A. Parkinson, circuit judge of Jackson county, to compel respondent to vacate an order adjudging that relator pay certain sums as alimony, solicitor’s, fee, and costs, awarded in the divorce proceedings of his wife, Maud Z. Mesler, and that in default an order of contempt be entered in said court.
    Submitted June 22, 1915.
    (Calendar No. 26,266.)
    Decided September 28, 1915.

      John Emmet Sullivan, for relator.

      McHugh, Gallagher, O’Neil & McGann, for respondent.
   Stone, J.

The relator filed a petition for a writ of mandamus to compel respondent to vacate an order made on January 1, 1914, ordering and adjudging that relator pay to Maud Z. Mesler, his former wife, the sum of $368, being permanent alimony and interest thereon, due under a decree for divorce theretofore entered by respondent, and that relator pay the further sum of $25 as solicitor’s, fee for services in such proceedings, and also $15 for the costs and expenses of Maud Z. Mesler in such matter within 30 days, and that in default of the payment of said sums that said relator be adjudged to be in contempt of court, and that an order of contempt be entered in said court.

The relator represented that on January 13, 1910, the said Maud Z. Mesler filed a bill for divorce in the circuit court for the county of Jackson, in chancery, against him, upon the grounds of extreme cruelty, nonsupport, and adultery. The bill prayed for alimony, both temporary and permanent, and for such further relief as should be agreeable to equity and good conscience :

The twelfth paragraph of the bill was as follows r

“Your oratrix further shows unto the court: That about July, 1908, defendant had been contributing nothing whatever to the support of your oratrix, and that she had consulted with the prosecuting attorney about having a warrant issued for him for nonsupport, and that their property matters, were adjusted by his making an agreement to pay. her $300 at the rate of $10 a month until the $300 should be paid. He partly carried out this agreement, and paid thereon about $60, and that there is a balance due her under the agreement of $240 and interest. That he has refused since to pay anything towards her support, although of sufficient ability so to do, and has grossly, cruelly,, and wantonly neglected to provide a suitable maintenance for your oratrix, and that she has been compelled tó work and earn her own living, although her health is impaired and not as good as it ought to be. That it has been impaired, and she believes permanently.”

That a writ of subpoena was issued and duly served upon relator on January 24, 1910. That this writ was in the usual form and had on it the following underwriting, to wit:

“Underwriting. A personal decree is sought against the defendant, Arthur M. Mesler, for a divorce, and the bill is not filed to reach interests in property, and not to obtain further relief against the remainder of the defendants.”

That the said bill was taken as confessed, and on July 13, 1910, a decree was duly entered in favor of complainant, dissolving the said marriage, and containing the following provision:

“It is further ordered, adjudged, and decreed that the said defendant, Arthur M. Mesler, having, as appears by Exhibit C on file in this cause, on the 3d day of July, 1908, undertaken and agreed in writing to pay to the said complainant the sum of $360, at the rate of $10 per month, commencing July 16, 1908, without interest, and that the said defendant has not complied with said agreement in full, but has paid only $40 thereon, and that the balance of $320 is-unpaid, it is ordered, adjudged, and decreed that the said defendant pay to the said complainant the said sum of $320 and interest thereon at the rate of 5 per cent, per annum until the same shall be paid in full.”

In the month of August, 1913, Maud Z. Mesler made an application to the respondent for an order upon said relator to show cause why an attachment should not issue against him and he be punished as for a contempt, by reason of his neglect in not paying said several sums of money mentioned in the said decree of July 13, 1910. Said application represented that a certified copy of the decree had been served on the relator, and a demand made for payment of said moneys, and that the same remained unpaid. An order to show cause was issued by the respondent and duly served on the relator, who appeared and answered that he did not know the contents of said decree until December 17, 1910, when a certified copy was served upon him; that until then he did not know that he was ordered by a decree to pay any sum of money. He represented his inability to pay the same, or any part thereof. He further denied that he had been guilty of contempt of court, for the reason that he had been unable to pay the amounts ordered in the decree to be paid, and also for the reason that the sums mentioned in said 'decree, and thereby ordered to be paid, were not properly matters to be adjudged and ordered in a decree for divorce, excepting the solicitor’s fees and costs, and in any adjudication of alimony the payment of the same could not be enforced by contempt proceedings.

After a hearing of the parties, and on the 1st day of January, 1914, the respondent entered an order reciting the proceedings and the appearance of the parties before him, that arguments had been made and briefs filed by solicitors for the respective parties, and the fact appearing that no part of the said sum of $860, mentioned in the decree, had been paid after demand, the order concluded in substance as stated by relator in his petition, as aforesaid.

Numerous objections and exceptions were filed by relator to the entry of this order, but no motion seems to have been made to vacate the same. It is urged that the said order, by its terms, amends the decree by making the payment aforesaid ordered and decreed as alimony, whereas the said decree is silent as to the same; that the said order is contradictory of and inconsistent with said decree, as the said decree refers to a certain contract made and entered into between the parties hereto a long time prior to the beginning of said suit, wherein and whereby said complainant waived and surrendered her right to alimony in case a suit for divorce was commenced; and because the court cannot enforce the payment of said sum by contempt proceedings, because it is a mere debt, and because defendant has by his showing made it appear that he is unable to pay said amount, and because the subpoena served on defendant in the case states that no decree affecting property is sought by complainant, and this order undertakes to compel defendant to pay over' to complainant $368 of his money.

In his opinion filed by the respondent upon said proceeding, and referring to the said sum of money, he said:

“It [the agreement] was executed by the parties after their separation and provided for the payment of $360 at the rate of $10 per month by the defendant, and was to be received by her on account of her releasing him from all claim against him as her husband for support, maintenance, alimony, either temporary or permanent, suit money, solicitor’s fees, etc. See paragraph 6 of that agreement. Apparently that was deemed a suitable sum to pay her because of their marriage relation and the separation, and was not the confession of any pecuniary indebtedness, on his part, nor was she to receive it in payment or satisfaction of any indebtedness. Had no such agreement been made, the court might have fixed upon its terms as a proper award of alimony. Should the defendant escape its payment because the court adopted it, simply because the court by the decree did not use the term ‘alimony’ ? The purpose of the award seems to be sufficiently evident. The decree refers, to Exhibit C as being on file in the cause, and that agreement provides for those payments to be made for complainant’s support and maintenance, or in consideration of her releasing him from support, maintenance, alimony, etc., and I think it is sufficiently plain, although it might have been stated more plainly, that her sum so awarded in the decree was out of the defendant’s property and for alimony; and that in this respect it is within the jurisdiction of the court and that the authority of the court was lawfully and properly exercised. In attempting to give force and effect to that agreement in and by the decree, the court made it. the duty of the defendant to do the very thing he had promised to do, and I do not quite see why he should be excused because the court adopted as his duty the very thing he had assented to and prescribed. The decree accomplishes the same end that the agreement seeks. * * * It seems to me that it is a necessary inference that such fulfillment of the undertakings on his part in that agreement, being for alimony, is virtually decreeing alimony to her, and that defendant is not in any wise misled. I therefore hold that he should be required to make these payments, and for failure so to do should be adjudged in contempt, unless there is some other valid reason for not so adjudging.”

The writ of mandamus might properly be denied, for the reason that po application was made by the relator to respondent to set aside the order complained of. Hitchcock v. Circuit Judge, 97 Mich. 614 (57 N. W. 189) ; Freud v. Circuit Judge, 131 Mich. 606 (92 N. W. 109) ; Bennett v. Circuit Judge, 181 Mich. 700 (148 N. W. 162), and cases there cited. However, as the case is fully briefed upon the merits, and presents a question of some importance, we are inclined to dispose of it on its merits.

The claim is made by the relator that the sum awarded by the court in pursuance of the agreement referred to is not alimony in the proper sense of that term. We do not agree with counsel in that regard. We think it clearly appears that the sum ordered to be paid was intended for the support of the wife. Permanent alimony has been defined as a provision for the support and maintenance of a wife out of her husband’s estate during her lifetime, ordered by a court on decreeing a divorce. The award of alimony is essentially a different thing from a division of property of the parties. See Black’s Law Dictionary, under the title of “Alimony.”

We have examined the authorities cited by counsel for relator to the effect that the court has no jurisdiction to settle claims of a wife against her husband for her separate property in a divorce suit, but we do not think these authorities are controlling of the question here. In the case of Julier v. Julier, 62 Ohio St. 90 (56 N. E. 661, 78 Am. St. Rep. 697), it was held that in an action for divorce, properly instituted, where the petition contains a prayer for- general relief, the court has jurisdiction to adjust and settle the rights of the parties with respect to the nature and amount of the alimony that shall be awarded and the terms and conditions of its payment, and in doing so to confirm any agreement of the parties concerning the same that appears to be just and reasonable, and render a decree in conformity therewith.

As early as the case of Randall v. Randall, 37 Mich. 563, it was held that when a separation between husband and wife had actually taken place, or when it has been fully decided upon, it is competent for the parties to make a suitable provision for the maintenance of the wife .and children, where such arrangements are fair and equal and are not the result of fraud and coercion. Such seems to have been this agreement. The respondent distinctly found that the agreement was made after the parties had separated. The right to institute contempt proceedings in divorce cases is to be found in Act No. 230, Pub. Acts 1899. That act has been construed by this- court in a number of cases. See Judd v. Judd, 125 Mich. 228 (84 N. W. 134); Brown v. Brown, 135 Mich. 141 (97 N. W. 396). In Mayer v. Mayer, 154 Mich. 386 (117 N. W. 890, 19 L. R. A. [N. S.] 245, 129 Am. St. Rep. 477), it was held that this statute did not authorize such proceedings in a case brought in this State to enforce a decree for alimony made by a court of another State.

It is also urged by relator’s counsel that the respondent had no authority to make the provision referred to in the decree and to make the order complained of, because of the underwriting on the subpoena. An award of alimony, when made, as in this case, is a personal decree, and not an interest in property necessarily. The relator was informed that a personal decree was sought against him for a divorce, and that the bill was not filed to reach interests in property. We do not think that the relator could have been misled by the underwriting, and are of the opinion that it was sufficient to confer upon the court the authority to make the decree complained of. It may be proper to state that in the original decree provision was made for the payment by relator to the said Maud Z.'Mesler of the sum of $200, being personal estate of hers that came into his hands. The respondent in the contempt proceedings distinctly held that that portion of the decree was void, and no attempt has been made to enforce it in these proceedings.

For the reasons given, the writ of mandamus is denied, with costs to the respondent.

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

The late Justice McAlvay took no part in this decision.


text:
    DYER v. PEOPLE’S ICE CO.
    1. Appeal and Error — Exceptions—New Trial.
    In the absence of exceptions to the decision of the court below, this court cannot review the action of the circnit judge in overruling a motion for a new trial on the ground that the verdict is against the great weight of the evidence and grossly excessive.
    2. Evidence — Statement op Pact — Conclusions op Witness — ■ Animals.
    In an action for personal injuries caused by a runaway horse, testimony of the driver that the horse was not a quiet horse, that he was a bad actor, was nervous, and would start off with every little sound, was not inadmissible as a conclusion of the witness, but may be said to be a statement of a fact, since, he stated in detail the conduct of the horse.
    3. Same — Notice—Hearsay—Animals—Vicious Character.
    Evidence of the driver that he had, prior to his taking charge of the horse, heard that he was a bad actor and had run away, was admissible as tending to show notice of the vicious character of the horse.

      4. Same — Appeal and Error.
    Where defendant’s witness had already testified that he could not remember the bridle that the horse wore on the day of the injury, it was not error for the court to exclude an answer to a question asked witness whether he had furnished a bridle that would be loose on the horse’s head.
    5. Trial — Instructions.
    Where the substance of requests to charge was given in almost the exact language of the requests, no error was committed in refusing to charge as requested.
    6. Negligence — Inference—Instructions.
    In an action for personal injuries caused by a runaway horse, a charge that negligence may be inferred from the circumstances of the ease, that the jury were at liberty to draw the inference of negligence from all the circumstances, if they should find that they warranted such inference, and that the whole question of inference that was to be drawn was a question for the jury, was correct.
    Error to Wayne; Hosmer, J.
    Submitted June 16, 1915.
    (Docket No. 55.)
    Decided September 28, 1915.
    Case by Agnes F. Dyer against the People’s Ice Company, a corporation, for personal injuries. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      E. T, Berger, for appellant.

      Charles T. Wilkins, for appellee.
   Stone, J.

This is an action on the case to recover damages for injuries inflicted upon the plaintiff by a runaway horse belonging to the defendant. The defendant is, and at the time of the grievances complained of was, a domestic corporation engaged in the manufacturing business at Detroit. In such business it owned and kept at its stables a number of horses and wagons, among them a horse called the “Louie horse,” and a single ice delivery wagon, used in delivering ice to its customers in the city. The declaration alleged, and on the trial there was evidence tending to show, that it was well known to the defendant that said horse was a high-strung, nervous, and irritable animal, and that upon the occasion of the injury complained of the horse wore a bridle which was too large for it, which permitted the bits to drop out of its mouth when not being driven.

On September 30, 1912, this horse and wagon, while in charge of one Charles Dunlap, defendant’s driver,, were left standing on Randolph street, the horse-hitched to a weight only, while the driver, as was his. custom, entered a place for his regular midday lunch.. When Dunlap came out of the place where he had lunched, the horse had the bridle pulled off its head, and had it under his feet. Dunlap ran toward the horse, the door slammed, and the horse started, .and he was unable to stop the horse. It ran on Cross street to John R. street, Dunlap trying unsuccessfully to stop it; but there was no way in which to hold it, as the bridle was off and between its legs, with the weight still attached to the bridle. The horse ran up John R. street, across Adams, to Elizabeth street, turned westerly towards Woodward avenue, and, in turning, swung across the sidewalk on Elizabeth street and over the curb, and ran against and upon the plaintiff, who was kneeling upon the grass fixing some curtains on a. stretcher in front of her house, on the corner of John R. and Elizabeth, streets, inside her lot line, and between the sidewalk and her house. The horse struck the house; one shaft of the wagon and one leg of the horse going through the window, the horse remaining outside. The horse ran against the plaintiff’s back, and knocked her down, and underneath the horse and wagon. She was trampled upon by the horse and severely injured. She sustained comminuted fractures of both the bones of her right leg. The fibula had a comminuted fracture about inches above the ankle. The larger bone was badly crushed and fractured 4 to 6 inches, a spiral fracture, and she was bruised about the knee. There was a bruise on the left leg about halfway between the thigh and the knee. The left ankle was badly bruised and scraped, and the skin corroded halfway to the knee. Her hip and back were bruised, and the zygomatic arch on the left side of her face was broken, depressed, and pushed in, making mastication very painful. Plaintiff was confined to her bed for about 15 weeks, and was then able to sit up. She afterwards used a wheel chair for a time, and has since gone on crutches. The right leg is now about three-quarters of an inch shorter than formerly. She was a married woman, 42 years old at the time of the injury. Her husband died before the trial.

The evidence tended to show that prior to the accident the plaintiff was a strong, healthy woman. Since the injury she has suffered much pain in her head, back, spine, and left leg, is nervous, and does not sleep well, and is unable to perform any labor. Her doctors’ bills were upwards of $335, at the time of the trial, which was in November, 1914. Before and at the time of the injury she was earning from $18 to $26 per week keeping boarders and doing fine laundry work.. There was much medical testimony by the attending physicians as to the extent and result of the plaintiff’s injuries. Upon the trial the plaintiff called the defendant’s driver, Dunlap, as a witness for cross-examination under the act of 1909. The trial resulted in a verdict and judgment for the plaintiff of $5,000. A motion for a new trial was made by the defendant, and denied, but no exceptions were taken to the decision refusing such motion. The defendant has brought the case to this court, and has assigned error upon the following grounds:

(1) Because the verdict is against the great weight of the evidence.

(2) Because the verdict is grossly excessive.

(3) Because the court erred in the admission of certain testimony, and in the charge.

The first two reasons are based upon the denial of defendant’s motion for a new trial, and could not be raised otherwise. In the absence of exceptions to the decision refusing the motion, we cannot review the action of the circuit judge in overruling the motion for a new trial. It has been so held repeatedly. Ginn v. Coal Co., 143 Mich. 84 (106 N. W. 867, 107 N. W. 904) ; Moore v. Insurance Co., 143 Mich. 424 (106 N. W. 1116). We will say, however, that an examination of the entire record satisfies us that, had exceptions been taken to the denial of motion, they would not have been availing, for the reason that upon the merits we are of the opinion that it cannot be said that the verdict was against the great weight of the evidence, or that the verdict was grossly excessive. The foregoing statement of the nature and extent of the injuries shows that the plaintiff was permanently disabled, and her earning ability destroyed, to say nothing of the accompanying pain and suffering. Under such circumstanaces it cannot be said that the recovery was excessive.

It remains for us to consider such of the rulings upon the admission of testimony and the charge as are properly presented and are meritorious.

The fourth assignment of error is to the effect that the court erred in refusing to strike out the following testimony of the witness Dunlap, the defendant’s driver, on whose negligence the action is largely based:

“Q. Had you known that horse around the barn before you took him out, and given to drive about a week before the accident?
“A. I just heard about him.
“Q. Did you hear him talked around the barn as the 'Louie horse’?
“A. Yes.
“Q. What sort of a horse was he? State whether he was. a quiet horse, or not a quiet horse.
“Defendant’s Counsel: I think that is a question for the jury to decide.
“Q. Whether he was a quiet horse or not?
“The Court: Answer the question.
“Defendant’s Counsel: I think we should find out what he did and did not do; how the witness used this horse, left him standing or not; and, if so, whether he ran away before.
“The Court: Answer the question.
“Defendant’s Counsel: Note an exception.
“A. He was not a quiet horse.
“Q. He was not a quiet horse?
“A. No.
“Defendant’s Counsel: I would ask to strike it out as calling for a conclusion, a question that the jury should be allowed to pass upon.
“The Court: Motion denied.
“Defendant’s Counsel: Note an exception.
“Q. He is what is called a bad actor?
“Defendant’s Counsel: I object to that question as incompetent, irrelevant, and immaterial, a question for the jury to decide from the facts as might appear in evidence.
“The Court: Answer the question.
“Defendant’s Counsel: Exception.
“Q. He is what is called a bad actor, known as a bad actor ?
“A. He was called a bad horse around the barn?
“Defendant’s Counsel: Move to strike it out as calling for a conclusion and hearsay evidence.
“The Court: Let it stand.
“Defendant’s Counsel: Exception.
“The Court: You were acquainted with the horse and drove him?
“A. Yes.
“The Court: He says that he was not a quiet horse.
“Q. State whether he was a nervous horse.
“A. Yes, he was nervous. He was easily excited, if you call that nervous.
“Q. Isn’t it a fact, if you wanted to approach him from behind, you would have to be careful how you would go up to him, he would start off?
“A. He would start off with every little sound coming from the door; that is, he was accustomed to that.
Defendant’s Counsel: Move to strike it out, as not responsive and calling for a conclusion. It is a question for the jury.”

It will be noted that no exception was taken to the refusal to strike out the last portion of the testimony; but upon the merits of the question we are of the opinion that there was no error in the rulings. Whether answers are conclusions, or statements of fact, is sometimes a close question. The language of Justice Campbell in Kelley v. Richardson, 69 Mich. 430, 436 (37 N. W. 514), as quoted by us in Eesley Light, etc., Co. v. Power Co., 172 Mich. 78, at pages 86 and 87 (137 N. W. 663), is pertinent here. Impressions of personal qualities are constantly acted on as facts, and to say that a horse was nervous or quiet may be said to be the statement of a fact. But in this instance the witness stated in detail the conduct of the horse.

The seventh assignment of error is based upon the admission and refusal to strike out the following testimony of the witness Dunlap:

“Q. You had heard, prior to your taking charge of the horse, you had heard of his running away?
“A. I had heard of his running away.
“Defendant’s Counsel: I move to strike it out as hearsay, and I will take an exception.
“Plaintiff’s Counsel: Your honor will see that we are asking this witness as one of the employees of the company, a driver of this kind; it shows the witness’ knowledge of what the horse was.
“The Court: All right.
“Q. You had heard that he had run away several times prior to the time you took charge of him?
“The Court: What is the object of that?
“Plaintiffs Counsel: That he knew he had run away prior to this time.
“The Court: Answer the question.
“Defendant’s Counsel: I would like to make an objection to that question, as calling for hearsay, and incompetent, irrelevant and immaterial.
“Q: It had been called to your attention several times that the horse was a bad actor and a runaway?
“A. Yes, he had.
“Defendant’s Counsel: I have never seen a more willing witness, and take exception to any remarks of that kind. I move to strike out the answer.
“The Court: Let it stand.
“(Objected to as hearsay.)”

This evidence was admissible as tending to show notice of the vicious character of the horse. Robbins v. Magoon & Kimball Co., 186 Mich. 672 (153 N. W. 13).

What we, have already said applies to the eighth, ninth, and tenth assignments of error.

Under the twentieth assignment of error, the only matter excepted to was the ruling excluding an answer to the following question put to the defendant’s witness Smith:

“Q. Did you furnish to Charles Dunlap for use on ‘Louie’ a bridle that would be loose on Louie’s head?”

This witness had already testified that he could not remember the bridle that “Louie” wore on the day of the injury. It was therefore immaterial whether or not he had furnished for use a bridle, whether loose or not. No other ruling was made that was excepted to in that connection, and we find no error here.

The twenty-first assignment of error is to the effect that the court erred in refusing to charge the jury as requested in defendant’s seventh and eighth requests to charge. A reference to page 80 of the record will show that the substance of these requests was given, and in almost the exact language of the requests.

By the twenty-second assignment of error it is claimed that the court erred in charging the jury as follows:

“Negligence, like any other fact, may be inferred from the circumstances of a case. And so from the case and testimony which has been offered you are at liberty to draw the inference of negligence, and if you should find from — you are at liberty to draw inference of negligence from all the circumstances, if you should find that they warrant such inference. But, after all, the whole question of inference that is to be drawn is a question for you and not a question for me.”

There is evidently a typographical error in the above quotation. However, in substance the charge was correct, and has been approved by us many times. Alpern v. Churchill, 53 Mich. 607-613 (19 N. W. 549) ; Barnowsky v. H els on, 89 Mich. 523-527 (50 N. W. 989, 15 L. R. A. 33) ; Schoepper v. Chemical Co., 113 Mich. 582-589 (71 N. W. 1081) ; La Fernier v. Lighter & Wrecking Co., 129 Mich. 596, 606 (89 N. W. 353) ; Maki v. Copper Co., 180 Mich. 624 (147 N. W. 533).

We have laboriously examined this record, and finding no reversible error therein, the judgment of the circuit court is affirmed.

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

The late Justice McAlvay took no part in this decision.


text:
    MORGAN v. ZANGER.
    Brokers — Commissions.
    In an action by a broker .to recover a commission agreed to be paid to him for procuring a tenant of real property, where, there is no evidence that the proposed tenant was ready, willing, and able to carry out the terms of his offer, plaintiff is not entitled to recover.
    Error to Wayne; Van Zile, J.
    Submitted June 22, 1915.
    (Docket No. 90.)
    Decided September 28, 1915.
    Assumpsit by Charles L. Morgan against G. W. Zanger for commissions for procuring a tenant. Judgment for defendant on a directed verdict. Plaintiff brings error.
    Affirmed.

      George W. Trendle, for appellant.

      Lucking, Helfman, Lucking & Hanlon, for appellee.
   Stone, J.

This is an action in assumpsit to recover a commission of $5,000, for alleged services in obtaining a tenant for certain premises in the city of Detroit. The declaration alleges:

That on or about October 26, 1911, the defendant made an agreement with the plaintiff to pay the latter said sum of money as a commission for certain services to be rendered in procuring a tenant for certain described property; said agreement being in substance as follows:

“That if this plaintiff would secure a written offer from certain persons, to wit, one J. M. Ward, of the city of Detroit, Wayne county, Michigan, for a 30-year lease of the above-described premises, at a net annual rental to this defendant of $18,000 for each year of said term, lessee to pay all taxes and insurance, said lessee to further agree, in said offer, to deposit, as security for said rentals, either a $30,000 cash deposit, said deposit to draw interest from this defendant at the rate of 6 per cent, per annum (the same to be payable in installments during the erection of a theater building, to be by this defendant erected on said above described premises at a cost not to exceed $100,000, the same to be erected for the use of said tenant or tenants as a consideration for said rentals), or said offer to contain the indorsement of two first-class business men of the said city of Detroit, then the said defendant would pay this plaintiff the said sum aforesaid.”

That the said defendant then and there promised to pay the plaintiff, upon receipt of such written offer as aforesaid, the sum of $5,000. That although the plaintiff, on, to wit, November 14, 1911, performed said work and procured and tendered to said defendant such written offer, as agreed, and fully performed and carried out all the agreements by him to be performed and carried out, yet the said defendant refused, and still refuses, to pay the said sum so promised, although demand has been made on him, etc. Then followed the common counts.

The plea was the general issue.

Upon the trial it was the claim of the plaintiff that, at the request of the defendant, he (the plaintiff) obtained in writing from said Ward the following offer, which was delivered to the defendant, to wit:

“With reference to the lease of your property on Broadway and your erecting a theater for us with a seating capacity of 1,500, to cost not to exceed $100,-000: We will pay you $18,000 per year rental of same, and pay all taxes, insurance, etc., on a 30-year lease. As a guarantee of good faith on our part and security for rent, we will put up either a $30,000 cash deposit, payable in installments during the erection of the building, or the indorsement of two first-class business men of this city; $30,000 cash deposit to bear 6 per cent, interest. Trusting we can close this matter in the near future, I remain
“Yours very truly,
“J. M. Ward.”

It was the further claim of the plaintiff upon the trial that after further negotiations it finally developed that the defendant only had a 13-year lease of a part of the property, that one Waldo A. Avery was the owner, and that he (Avery) would not sanction the arrangement, and consequently the deal fell through. The plaintiff further claimed that Ward stood ready, willing, and able to carry out his written offer, and that it was not by reason of any default on Ward’s part that the deal was not consummated.

The defendant claimed that he told plaintiff, and the latter fully understood, that Mr. Avery owned the premises, and that all negotiations must be submitted to, and be subject to the approval of, Mr. Avery. While the plaintiff attempted to deny this, yet on cross-examination he testified that defendant mentioned Mr. Avery as being the owner of the property, and interested in the matter, and that he was to furnish the money.

The plaintiff claimed that he was entitled to his commission of' $5,000, he having brought the parties together at the request of the defendant, and having obtained the written offer which was accepted by the defendant under the promise to pay such commission; that it made no difference to the plaintiff what the attitude of Mr. Avery was, inasmuch as his agreement was with defendant alone.

There was evidence tending to support the respective claims of the parties, and much conflict in their claims. At the conclusion of the testimony the trial court directed a verdict and judgment for the defendant, upon the ground that, taking the most favorable view of the evidence, the plaintiff had notice that Mr. Avery was the owner of the premises, and had an interest in the very matter of the contract, and that the whole matter of the offer was tentative, and dependent upon the approval of Mr. Avery, who was to furnish the money for the erection of the proposed building.

The plaintiff has brought the case here for review, and, while there are a number of assignments of error, the plaintiff says there is but one question raised, and that is: Did the trial court err in directing a verdict for the defendant, and in refusing to submit the case to the jury upon plaintiff’s requests to charge? The position of the plaintiff is fairly disclosed in the following objection to the introduction of evidence offered by defendant to show the ownership of the property:

“Plaintiff’s Counsel: I want to enter an objection to the admission of this testimony in regard to the ownership ; that the. ownership has no bearing whatever on this case, for the reason that all we must prove is that we produced a client, or purchaser, willing and able, and that the ownership of the property was a personal matter between Mr. Zanger and his client; and that the ownership has nothing to do with this contract.”

The plaintiff’s second request to charge was as follows:

“I charge you that if you find that the party obtained by plaintiff was ready, willing, and able to carry out the terms of the agreement introduced, and was prevented from so doing by the acts of the defendant, then I charge you to bring a verdict for plaintiff for $5,000 and costs.”

The position of the plaintiff is fairly disclosed by the following question and answer in his cross-examination :

“Q. You brought this paper, and considered that you earned $5,000?
“A. I certainly did; yes, sir.”

Here he claims the right to recover on a consummated contract.

Defendant’s propositions are:

(1) Plaintiff is not entitled to recover, because he knew that Mr. Avery was “the owner of the property * * * interested in it * * * financially, to put up the building,” and that the payment of commission to plaintiff was conditional upon the final acceptance of the offer by Mr. Avery.

(2) The maker of the offer, J. M. Ward, was never able to carry out his offer and to provide a $30,000 cash deposit,” or “the indorsement of two 'first-class business men.”

(3) The offer of J. M. Ward was not certain and complete, and the offer and acceptance thereof would not have constituted an enforceable contract.

Passing the first proposition and considering the second, we are of opinion that the man Ward, by his own undisputed testimony, was not able or ready to carry out his offer. He had at most but $5,000, and his testimony was very vague and unsatisfactory as to his having that amount. -The whole matter of carrying out the terms of the offer was “in the air,” so to speak.

It is conceded that the two “first-class business men” whose indorsement was offered were Harry E. Beecher and Charles J. Holton. The record shows that it was undisputed that they never authorized Ward or anybody to agree that they would either indorse or guarantee any lease or agreement whatever, or agreed to put any money into the proposition. They had made no binding agreement whatever.

The plaintiff seems to be of the opinion that his right to the. commission wás established when he brought a paper offer, and that it was not necessary to show that Ward was able and ready to carry, out the terms of his offer. We do not so understand the law. In fact, by the statement of counsel in his objection to testimony, and in his request to charge, which we have copied above, it is conceded that, to entitle plaintiff to recover, lie must show that he produced a party “ready, willing, and able to carry out the terms of the agreement introduced.” His failure to show this constituted an insuperable objection to his recovery. In Evans v. Russell, 180 Mich. 534 (147 N. W. 489), it was held that, where a plaintiff produced a purchaser able and willing to purchase and pay the price, he was entitled to recover. Nothing less would entitle him to recover. See, also, Blakeslee v. Peabody, 180 Mich. 408 (147 N. W. 570). None of the authorities cited by plaintiff’s counsel would justify a recovery, in the absence of this evidence. For the reason above stated, we are of opinion that the trial court reached the correct conclusion, and did not err in directing a verdict for the defendant.

We also think that there was merit in defendant’s third proposition; but we shall not discuss it, for the reason that what we have already said disposes of the case.

The judgment of the court below is affirmed.

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

The late Justice McAlvay took no part in this decision.