author: Carpenter, C. J. Per Curiam.

text:
    GINN v. W. C. CLARK COAL CO.
    1. Accord and Satisfaction — Part Payment — Sufficiency.
    After defendant had received and accepted a part of certain coal which it had bought of plaintiff on contract, and refused to receive the balance, plaintiff wrote demanding payment for all the coal then shipped, inclosing an itemized statement of said shipments, including several .rejected cars. Defendant struck from the statement the items representing the rejected cars, and returned it, together with its check for the .balance, and a letter stating that the remittance was in full satisfaction of the account to date. Held, that plaintiff, by using the check, did not assent to an accord and satisfaction, as he had a right to understand that defendant, by striking the items from the statement, intended to withdraw them from the account which the check was intended to pay.
    2. Sales — Rejection of Goods — Grounds of Rejection — Assertion of Other Grounds.
    Where a buyer of coal refuses to receive it, on the ground that it is not the variety he purchased, he cannot thereafter assert that he was justified in rejecting it because not of a merchantable quality.
    3. Same — Resale by Seller.
    Where a buyer of coal refuses to receive it at his place of business, the seller has a right to resell in that market for the best price obtainable, and is not bound to carry it back to the place of shipment, though the price is greater there.
    4. Same.
    In an action by the seller of coal against the buyer, who had refused to accept a shipment, a telegram from the seller to his agent, authorizing a resale at a certain price, has no tendency to prove that the coal was of an inferior quality.
    5. Saving Questions for Review — Motion for New Trial — Necessity of Exceptions.
    Where no exceptions are taken to a denial of a motion for a new trial, it is not reviewable on appeal.
    on motion for rehearing.
    Sales — Rejection of Goods — Damages—Evidence.
    In an action by the seller for breach of a contract for the sale of certain coal, evidence tha,t the coal shipped to and rejected by the buyer was not of a merchantable quality, is not admissible to reduce damages, either as to the coal which was not shipped, or as to the coal rejected, the only'Claim made at the time of the rejection being that the coal was not of the variety ordered.
    Error to Wayne; Rohnert, J.
    Submitted June 16, 1905.
    (Docket No. 23.)
    Decided March 5, 1906.
    Rehearing denied June 4, 1906.
    Assumpsit by Charles S. Ginn and Frederick J. Ginn, copartners as the Ginn Coal & Stone Company, against the W. C. Clark Coal Company for breach of a contract for the purchase of certain coal. There was judgment for plaintiffs, and defendant brings error.
    Affirmed.

      Wilkinson, Post & Oxtoby (Gillett & Clark, of counsel), for appellant.

      Frederic T. Harward, for appellees.
   Carpenter, C. J.

Plaintiffs and defendant entered into a written contract whereby the former agreed to sell, and the latter to buy, 60 cars of coal — described in the contract as Pine Grove coal — to be delivered two cars each day, commencing October 15, 1902. Defendant received 19 of these cars, and refused to receive other cars, upon the ground that the coal shipped was not Pine Grove coal. After some negotiations, which will be hereinafter stated with more detail, defendant paid for the coal received, and refused to pay damages for that which it refused to receive. Plaintiffs brought this suit and recovered damages in the court below.

Defendant contends that the trial court erred in charging the jury that there was no evidence from which the jury could find that by an agreement between the parties defendant had satisfied plaintiffs’ claim. The evidence from which defendant claims the inference of accord and satisfaction should be drawn may be briefly stated, as follows: After defendant had received part of the coal, and had refused to receive the balance, plaintiffs wrote demanding payment for all the coal then shipped, inclosing an itemized account of said shipments. To this letter defendant replied that the coal received by it did not correspond with the contract, but offered to pay for said coal if plaintiffs would accept the same in full satisfaction of their claim. Plaintiffs at once replied:

“A check of your account shows that $1,418.69 is the correct amount due from you on the cars which you have-accepted. We demand that you remit us immediately that amount in settlement for those cars.”

Defendant thereupon sent plaintiffs.a check for $1,418.69 and the following letter:

‘ ‘ Inclosed herewith we hand you our check for $1,418.69, being in full satisfaction of your account to date.”

The letter also inclosed a voucher prepared by defendant to be signed by plaintiffs which indicated that the money paid in full the account shown in the “attached statement.”., The “attached statement” was the itemized account above mentioned (which plaintiffs had transmitted to defendant) with a line drawn through eaoh of the items for shipments which defendant had refused to receive. Plaintiffs at once and without protest accepted and used this check. We think the trial court correctly charged that this evidence did not warrant a finding of accord and satisfaction. Plaintiffs had a right to understand that defendant, by drawing lines through the items for 'shipment not received, intended to withdraw them from the-account which the check was intended to pay.

Defendant complains because the trial court excluded certain testimony offered by it for the purpose of proving that the coal rejected was not of a merchantable quality. The trial court had a right to understand that defendant sought to introduce this testimony, not for the purpose of reducing damages, but solely for the purpose of justifying its rejection of the coal. As this court reviews upon writs of error only questions raised in the trial court, the question for our determination is: Was this testimony admissible to justify the rejection of the coal ? Defendant, after having a full opportunity to examine the coal, notified plaintiffs that they rejected the same for a certain specific ground, viz., the coal was not Pine Grove coal. Plaintiffs had a right to act upon the assumption that this was the only ground upon which defendant relied, and it would be unjust to permit defendant to rely upon other grounds on the trial of this case. This precise question was determined in Littlejohn v. Shaw, 159 N. Y. 188. There defendant rejected 25 tons of No. 1 cube gambier, which it had agreed to purchase from plaintiff, “for two reasons, first, because they are not good merchantable quality and again because they are not in good merchantable condition.” Upon a suit brought to recover damages it was insisted that it was incumbent upon plaintiff “to prove that all the terms of the contract were fufilled upon their part.” This was denied by the court, who said that defendants, by “ formally stating their objections, must be held to have waived all other objections.”

Défendant offered in evidence a telegram sent by plaintiffs December 5, 1902, from Ironton, Ohio, to their agent at Detroit, who on that day resold the' rejected coal. The telegram read: ■ :

4 4 Lump selling here today at $2.75 mines. If $1.90 best can do, sell.”

The trial court refused to permit this telegram to be introduced in evidence. We think-this ruling correct. The telegram had no tendency to prove, as claimed by defendant, that the coal was sold for an excessively low price. The coal was sold at Detroit. The plaintiffs had a right to resell for the best price they could obtain there.

They were not bound to carry the same to Ironton, and the market price at that .place was wholly immaterial. It is equally clear that without other testimony — and there was no such testimony — the telegram would not, as defondant claims, have warranted the inference that the coal sold was of an inferior quality.

Complaint is made because the trial court denied defendant’s motion for a new trial. No exceptions were taken to this denial, and therefore it is not re viewable in this court. Pearl v. Township of Benton, 136 Mich. 697.

No other question raised in defendant’s brief demands discussion. .

Judgment affirmed, with costs.

Grant, Montgomery, Ostrander, and Moore, JJ., concurred.

ON MOTION FOR REHEARING.

Per Curiam.

In our former opinion in this case, ante, 84, we^sustained the action of the trial court in excluding certain testimony offered by defendant tending to prove that the coal rejected was not of a merchantable quality. We then said that “defendant sought to introduce this testimony, not for the purpose of reducing damages, but solely for the purpose of justifying its rejection of the coal.” It is made to appear to us upon a motion for a rehearing that this statement was erroneous, and that the excluded testimony was offered, not only to justify the rejection of the coal, but also to reduce the amount of plaintiffs’ damages. It is our duty, to correct this error, but it is not our duty to grant a rehearing, unless the excluded testimony was admissible for the purpose of reducing damages.

Plaintiffs were allowed to recover damages for coal which defendant rejected and for coal which was never shipped. For the coal which was never shipped the damages recovered by plaintiffs was the difference between the contract price and the market price. It is obvious that the excluded testimony was not admissible to lessen these damages. Was it admissible to lessen the damages for the coal rejected ? Plaintiffs sold the rejected coal in Detroit, and were allowed as damages its contract price less the amount thus realized by its resale. We held in our former opinion that defendant could not prove that the coal was not merchantable, because it made no such claim when the coal was rejected, and that plaintiffs had a right to act upon the assumption that by formally stating its objections defendant waived all other objections. It follows from this holding — the correctness of which we do not doubt — that plaintiffs had a right to make the resale upon the assumption that the coal was merchantable, and that defendant cannot now destroy that right by proof that this assumption was unfounded. The excluded testimony was not therefore admissible for the purpose of reducing the amount of plaintiffs’ damages.

The motion for a rehearing is therefore denied. No costs will be given to either party.


source: Caselaw Access Project

author: Hooker, J.

license: Public Domain

text:
    ATTORNEY GENERAL, ex rel. WOLVERINE FISH CO., v. A. BOOTH & CO.
    1. Appearance — Effect—Waiver of Defects.
    Ordinarily a defendant who appears and pleads issuably cannot complain afterwards that the court has not acquired jurisdiction of the case, provided the cause is of a character within the power of the court to try.
    2. Same — Quo Warranto — Leave of Court — Waiver of Objection.
    Though there is nothing in the summons or copy served to indicate that leave to tile an information in the nature of quo warranto has not been granted, it is respondent’s duty to determine from the files and records of the court whether leave has been obtained and govern himself accordingly; and after appearing and pleading issuably to the information he cannot complain that leave to file it was not obtained.

      3. Courts — Jurisdiction—Objections—Waiver.
    Failure to obtain leave to file an information in the nature of quo warranto in the Supreme Court, under Act No. 255, Pub. Acts 1899, is a defect of jurisdiction which may be waived, since the court has jurisdiction of such cases.
    4. Monopolies — Prevention — Remedies — Quo Warranto — Conditions Precedent.
    Under sections 2 and 3 of Act No. 255, Pub. Acts 1899, the attorney general may bring quo warranto either in the circuit or Supreme Court at his option, and when he determines upon the latter course there is no necessity for a precedent suit in the circuit court.
    5. Same — Suit Against Foreign Corporation — Extra-Territorial Effect.
    Whether the remedy provided by Act No. 255, Pub. Acts 1899, against unlawful combinations in restraint of trade, is not limited, in the case of foreign corporations, to a denial of their leave to do business in this State, and' a revocation of their licenses, qusere.
    6. Quo Warranto — Information—Designation of Relator.
    Where the attorney general has the power to file an information in the nature of quo warranto in his own name, the fact that he unnecessarily adds to his own the name of a private person as relator is not objectionable, and does not amount to> a lending of his name for the benefit of a private person.
    7. Samé — Replication—Departure.
    Where an information in the nature of quo warranto against a. foreign corporation asks that respondent show its authority under which it claims to be a corporation, and its authority for doing business in this State, and the pleas attempt to show such authority, replications which attack the showing upon both points by claiming the invalidity of respondent’s incorporation, because in violation of the statutes of the State in which it is incorporated, and its right to do business here, by reason of its violation of oui statutes, do not raise issues not germane to the information.
    8. Monopolies — Quo Warranto — Parties.
    One of two persons who have made an unlawful combination is amenable to the law, whether his co-contractor is within reach of the law or not, and a respondent in quo warranto cannot complain that his co-contractors are not made parties respondent.

      9. Same — Corporations — Organization as' Part of Unlawful Combination.
    A corporation organized pursuant to a scheme of certain persons to carry out an unlawful combination becomes, when organized, a party to the original combination, and cannot contend that its existence is not unlawful on the theory that a single person cannot make a combination under the antitrust act.

    10. Constitutional Law — Privileges and Immunities — Foreign Corporations.
    The authority of a State to impose conditions upon the privilege of doing business by foreign corporations is not affected by the 14th Amendment of the Federal Constitution, and that amendment presents no obstacle to the enforcement of Act No. 255, Pub. Acts 1899, by excluding foreign corporations violating it from doing any business in the State.
    11. Quo Warranto — Foreign Corporation — Exercise of Franchise — Propriety of Remedy.
    Though a bill in equity would lie to restrain the unlawful acts of a foreign corporation in restraint of trade, proceedings in the nature of quo warranto are appropriate to inquire into its right to exercise franchises in this State in excess of those granted.
    Quo warranto proceedings by Charles A. Blair, attorney general, on the relation of the Wolverine Fish Company, Limited, against A. Booth & Company to determine the legality of respondent’s incorporation: On motion to dismiss.
    Submitted October 3, 1905.
    (Calendar No. 20,897.)
    Denied March 5, 1906.

      John J. Carton (Henry M. Duffield and Charles S. Thornton, of counsel), for the motion.

      John E. Bird, Attorney General (Fred A. Baker and Edward E. Kane, of counsel), contra. -

       As to illegal trusts under modern anti-trust laws, see note to Whitwell v. Continental Tobacco Co. (C. C. A. 8th C.), 64 L. R. A. 689.

   Hooker, J.

In the information in the nature of quo warranto, filed in this court by the attorney general, upon the relation of the Wolverine Fish Company, Limited, a Michigan copartnership, the defendant is alleged to be a corporation, organized under the laws of the State of Illinois, and is therein-charged with having, at. the city of Detroit for the period of six months prior to the filing of said information, unlawfully used without authority, warrant, grant, or charter, the following-“liberties, privileges, and franchises,” to wit, “ that of being a body corporate and politic in law, fact, and name, by the name of A. Booth & Company, and by the same name to plead and be impleaded, answer and be answered unto;” also “that of doing business in this State, and of exercising the powers, franchises, and functions of a corporation in this State.” The information prays due process of law, that said respondent answer “by what warrant it claims to have, use, and enjoy the liberties and franchises aforesaid.” The printed record omits the process and proof of service by which the respondent was brought in. Presumably it was by the usual method.

The respondent came in by counsel, and filed its pleas, in which it alleged:

1. Its lawful incorporation under the laws of Illinois.

2. That, under the Constitution and laws of the United States, it is not required to defend its corporate existence or right to use its franchises, privileges, etc., beyond the presentation of evidence of its due incorporation, documentary proof of which it included in the plea.

3. That as such Illinois corporation it is a citizen of Illinois, and as such entitled to all of the rights, benefits and privileges guaranteed by the Federal Constitution to citizens of Illinois, and that its corporate franchises, so far as granted by the State of Illinois, cannot be questioned in this court.

4. It alleges the validity of its incorporation, and claims that the legality of its franchises cannot be “questioned, impaired, or invalidated ” in this proceeding, and claims the application and-protection of “ section 10, art. 1, and section 1, art. 4, and section 1 of the Fourteenth Amendment to the Constitution of the United States.”

The foregoing pleas appear to have application to the questions of the validity of the incorporation, and the authority of the court to oust it of its corporate franchises, granted by the State of Illinois.

The pleas allege the following in relation to respondent’s business in Michigan:

1. That it has complied with the laws of this State in relation to the terms and conditions on which foreign corporations may be admitted to do business in this State.

2. That on January 27, 1902, the secretary of State at Lansing issued to it his certificate, entitling it to carry on business in Michigan.

3. That it has carried on business under such authority, and has filed the required reports from time to time.

Subsequently the attorney general filed replications to the several averments of the pleas. They allege:

1. That prior to, and at the time of the organization of the respondent corporation, there was in force in the State of Illinois a statute prohibiting and punishing the making of contracts, etc., in restraint of trade, which statute is set forth at length.

2. That at the time of this organization, there were many persons and companies engaged in the business of catching and dealing in fish, in Illinois, Michigan, and the Dominion of Canada, and these were specifically mentioned.

3. That on June 29, 1898, such persons, firms, and companies entered into a combination and contract to fix and limit the quantity of fresh-water fish to be caught and bought and sold in the States of Illinois and Michigan and the United States. To accomplish this result they caused to be executed and filed the necessary papers incorporating the respondent; most, if not all, of the incorporators being members of the several persons and firms aforesaid.

That, upon the organization of the respondent, the several members of the combination sold and conveyed to W. V. Booth, the president and a director of the respondent, acting on behalf of the combination, all of the business, properties, and plants and good will of the several members of the combination, at a valuation agreed upon, and said Booth, acting for and on behalf of the combination, paid for the same one-third in cash, one-third in the preferred stock, and one-third in the common stock of A. Booth & Co., which was duly assigned.

As a part of this arrangement the several stockholders, members, and persons composing the members of the combination executed to said Booth and his assigns an agreement and contract in writing that he had purchased the plant, business, and good will of such member, and had paid the consideration (naming it); each agreeing with the persons who signed and executed with him, and with said Booth, his heirs and assigns, that he and they would not for the next 10 years engage or be interested in the same or like kind or character of business as that theretofore conducted, or come in competition with the business of the persons engaged in such combination. The agreements, and the several plants, etc., were afterwards assigned by said Booth to the respondent, who has since operated the latter, and conducted the business theretofore conducted by said persons, etc., to the number, of 200 or thereabouts. It is further alleged that this was a device, by which the several concerns by and through the use of the respondent, and with its concurrence and active assent and co-operation, combined to monopolize the business of catching and selling fish as then conducted, and. as it should thereafter be conducted, and that respondent proceeded to continue and since has successfully conducted the same accordingly, and has become, and since January 1, 1902, has been the only jobber of said fresh-water fish (known in the trade as “hard fish”) in the United States.

This replication predicates upon the foregoing facts the claim that by reason of the organization for such object, and its subsequent operation, the respondent was organized and is conducting business in violation of the law of the United States and Illinois, and is therefore not entitled to the protection guaranteed by section 10, art. 1, or section 1, art. 4, of the Federal Constitution, or section 1 of said Fourteenth Amendment thereto. A second replication recites substantially the same facts, and alleges that respondent, in its organization and contracts, and in trans■acting business in Michigan, has violated Act No. 255 of' the Public Acts of Michigan for the year 1899. A third replication is similar to the second.

On March 20, 1905, a motion was filed by the respondent, asking that the cause be dismissed for the following reasons:

“ 1. That no leave was given by the court to file the information.
2. That no precedent suit or proceedings in quo warranto was begun against the respondent in this case as required by section 2 of the act of 1899.
“3. That no quo warranto against respondent, which is a foreign corporation under a charter granted by the State of Illinois* will lie, in the courts of this State, to question its lawful corporate existence.
“ 4. That proceedings against this respondent under the act of 1899 are, by the terms thereof, limited and restricted to the denial of respondent’s right to, and the prohibition that'it shall not do any unlawful business in this State.
“5. That the information is brought by the attorney .general on the relation of the Wolverine Fish Company, Limited, which is not authorized by the statute of 1899, .and this court has no jurisdiction over the cause.
“ 6. Because the court has no jurisdiction to revoke, forfeit, or vacate the charter of the respondent granted to it by the sovereign State of Illinois.
“7. Because the respondent is granted immunity and ■protection from any revocation, forfeiture, or vacation of, ■or any attempt or proceedings to forfeit or vacate the charter granted to it by the State of Illinois by section 10 of article 1, and section 1 of article 4, and section 1 of the .Fourteenth Amendment of the Constitution of the United States.
“8. Because the issue attempted to be framed by the replications in this cause cannot be properly framed under, and are at variance with the allegations in the information filed in this cause.
“ 9. Because the information only charges the respondent with usurping the lawful powers, privileges, franchises, and functions of a corporation in this State, and the replication admits the right of the respondent to exercise such lawful powers, privileges, and franchises, but alleges in contradiction and variance of the said allegations in the information that respondent is exercising the said powers, privileges, and franchises in the prosecution of a business which is in violation of the law of the State of Michigan against unlawful trusts and combinations.
“ 10. Because it appears from the record in this cause that the only issues which can be properly framed in this cause must be decided for the respondent, and that the respondent ought not to and cannot lawfully be compelled to reply to the allegations in the replication, all of which are contradictory of and variant from the allegations contained in the information which is the commencement of this suit.
“11. Because this proceeding having been commenced against A. Booth & Co. alone, Act No. 255, Pub. Acts 1899, has no application. That act is directed against combinations of two or more persons, firms, or corporations.”

Accompanying this motion was an affidavit which states that:

“Deponent further says that he is informed and believes and charges the truth to be that the copy of the information served upon respondent did not contain the words ‘ On the relation of the Wolverine Fish Company, Limited.’
“And deponent further avers that the said Wolverine Fish Company, Limited, is a limited partnership association organized under the laws of this State, and a competitor with this respondent in the fish business in the city of Detroit, and other places in the United States, and at present is, and for some time heretofore has been, in litigation in the circuit court of the United States for the eastern district of Michigan in equity, with this respondent; that no leave was obtained from this honorable court by the attorney general to file the information in this cause; that to the best of his knowledge, information, and belief, no notice of any application for such leave was ever served upon the respondent in this cause.
“ Deponent further says that to the best of his knowledge, information, and belief, no suit in quo warranto or other proceeding has been begun by the attorney general or by any prosecuting attorney of any county of this State against the respondent herein for any alleged violation of Act No. 255 of the Public Acts of the State of Michigan for the year 1899.”

Notice of hearing of said motion on March 28,* 1905, was duly served. The attorney general appears to have treated this motion as a demurrer to the replications, and oh March 24, 1905, he filed a joinder in demurrer, and the case has been argued and submitted at the present term, as a motion to dismiss.

Failure to obtain leave of court to file the information. Counsel for respondent assert that leave to file the information was necessary, under 3 Comp. Laws, § 9950, and that there is nothing in Act No. 255, Public Acts of 1899, authorizing a different practice. Ordinarily a respondent who appears and pleads issuably cannot complain afterwards that the court has not acquired jurisdiction of the case, provided the cause is of a character within the power of the court to try. Lane v. Leech, 44 Mich. 163; Ralston v. Chapin, 49 Mich. 274; Durfee, Probate Judge, v. Abbott, 50 Mich. 278; Thompson v. Benefit Ass’n, 52 Mich. 522; Barlage v. Railway Co., 54 Mich. 564; Stevens v. Harris, 99 Mich. 230; Sherwood v. Ionia Circuit Judge, 107 Mich. 136; Graham v. Cass Circuit Judge, 108 Mich. 425; In re Brooks' Estate, 110 Mich. 8; Dunlap v. Byers, 110 Mich. 109; Sarmiento v. The Catherine C., 110 Mich. 120.

Counsel contend that these authorities should not rule this case, for the reasons:

1. That there was nothing in the summons or copy served to indicate that leave had not been granted.

2. That, under the statute, the obtaining leave is jurisdictional, and any information filed without it is coram non judice.

Had leave been granted in this instance, the files and' records of the court should show it. It being wanting, respondent should have presumed its absence, and moved to dismiss before pleading. It was its duty to act upon the absence of such notice, and ascertain if it was desirable to take advantage of the point. In support of the second reason, respondent’s counsel cite Attorney General v. Lorman, 59 Mich. 162, which states that, under a certain statute there cited, leave of court must be first obtained to file an information. In that case the court stated that the proceeding was not under that statute, and, if the language used was more than a dictum, it was not equivalent to saying that an information filed without leave could not be made valid by appearance and plea. It is a general rule that only a want of jurisdiction of the subject-matter cannot be waived. Here the court has jurisdiction of such cases as this. The subject is fully discussed in the case of Peninsular Sav. Bank v. Ward (on rehearing), 118 Mich. 93. The point is not well taken.

Was it necessary to allege a precedent suit ? A discussion of this question requires allusion to the statute. Act No. 255, Pub. Acts 1899. Sections 2 and 3 of this act read as follows:

“ Sec. 2. For a violation of any of the provisions of this act by any corporation or association mentioned herein, it shall be the duty of the attorney general, or the prosecuting attorney-of the proper county, to institute proper suits or quo warranto proceedings in the court of competent jurisdiction in any of the county seats in the State where such corporation or association exists or does business, or may have a domicile. And when such suit is instituted by the attorney general in quo warranto, he may also begin any such suit in the Supreme Court of the State, or the circuit court of Ingham, Kent, or Wayne counties, for the forfeiture of its charter rights, franchises or privileges and powers exercised by such corporation or association, and for the dissolution of the same under the general statutes of the State.
“Sec. 3. Every foreign corporation, as well as any foreign association, exercising any of the powers, franchises or functions of a corporation in this State, violating any of the provisions of this act, is hereby denied the right and prohibited from doing any business in this State, and it shall be the duty of the attorney general to enforce this provision by bringing proper proceedings in quo warranto in the Supreme Court, or the circuit court of the county in which defendant resides or does business, or other proper proceedings byJnjunction or otherwise. The secretary of State shall be authorized to revoke the.certificate of any such corporation or association, heretofore authorized by him to do business in this State.”

In our opinion section 2 should be interpreted to mean that a suit or a quo warranto proceeding may be instituted in the circuit court by either the attorney general or prosecuting attorney, and “when” (i. e., if) a quo warranto shall be determined upon, it is optional with the attorney general to commence it in the Supreme Court. It is suggested that this cause was not brought under section 2, and could not be; it being said that it has application to domestic corporations only. Whether this be so or not, section 3 clearly gives the attorney general authority to file an information in this court, and there is nothing in either section that implies a requirement for a precedent suit before proceeding in this court.

Does Act No. 255, Pub. Acts 1899, limit the remedy under it, against foreign corporations, to a denial of their leave to do business in this State, and a revocation of their licenses ? Inasmuch as the attorney general concedes this to be the limit of the order which he claims, we need not discuss the above question.

May the attorney general lend his name, for the benefit of a private relator, to file an information under Act No. 255 ? Counsel for respondent cite no authority against such a practice. So far as we are able to judge from the record, this case is not one where this has been done. The attorney general was doubtless moved to act by the complaint of a private corporation, and upon its relation, but the cause is not prosecuted by the private* •corporation alone, but by the attorney general. Judging from the title of the cause, the attorney general has acted at the suggestion or instigation of a private person, but the proceeding is in the name of, and for the benefit of, the public, and it may be, doubtful if a private person could be permitted to move the filing of the information in this case, under the general rule that the State only can question the validity of a corporation and its right to do business. See 23 Am. & Eng. Enc. Law (2d Ed.), p. 620. In People v. Trustees of Geneva College, 5 Wend. (N. Y.) 220, it was said in a similar case:

“ It was unnecessary to have filed this information upon the relation of any one, but it is not vitiated thereby; the statement of a relator is mere surplusage.”

In People, ex rel. Warfield, v. Railway Co., 117 Cal. 612, the court brushed aside a similar objection by saying:

“ If the proceeding is one in which a private person can have no interest, the proceeding is not properly by relation. But the attorney general had the' power to institute. the proceeding, and in either form it is by him. If, unnecessarily, he has added that it is by relation of a named person, that does no harm. It does not convert the proceeding into a private action.”

We consider this a proper disposition of the question, whatever the relation of the Wolverine Fish Company to the cause may be.

Do the replications seek to frame a new and different issue ? The information apparently asks two things: First, that respondent show its authority under which it claims to be a corporation, and second, its authority for doing business in this State. Its pleas attempt to show such authority. The replications attack the showing upon both points by claiming the invalidity of its incorporation because in violation of the Illinois statute, and its right to do business here, by reason of its violation of our statutes. If not entitled to question its organization, the latter question is open to relator, and that replication is a proper response to respondent’s pleas, i. e., it cannot be said to raise an issue not germane to the information. It is in the nature of avoidance of the prima facie defense set up in the pleas, and is proper under the settled rules of common-law pleading.

Was the proceeding defective for want of other defendants ? The point is made that, under the act in question, this respondent cannot be prosecuted alone. We think there is no force in such a claim, for there can be no doubt that one of two persons who have made an unlawful combination is amenable to the law, whether his co-contractor is within, reach of the law or not. The death of one would not relieve the other from his liability. What we think to be the real point aimed at by this claim is not that the “proceeding must fail because brought against A. Booth & Co. alone,” but because it is claimed that no contract is alleged between A. Booth & Co. and any other person or corporation; in other words, that A. Booth & Co. has the right to make any kind of a purchase, so long as an unlawful combination is not a part of the contract, i. e., one person cannot make a combination under this act. It seems to be respondent’s theory that, although its origin was a scheme of certain persons to organize a corporation to carry out an unlawful combination which they had made, yet when organized, it was at liberty to carry out and perform such unlawful arrangement, and perform the work cut out for it, because they, and not it, were the parties to the unlawful agreement. This is a fallacy. The corporation, when organized, appears to have become a party to the agreement and combination, ■and an active participant in the measures adopted to carry it out. The statute needs no unreasonably broad interpretation to justify such a conclusion. Any kind of an agreement is within its terms — that is to say, a formal contract is unnecessary, for it is not a question of validity. Any arrangement or understanding, or agreement tacit, even, is sufficient. Indeed, all such contracts are, of necessity, invalid, being declared void by the statute. A valid one could not be made. This is not a proceeding to enforce the penalties provided by the several sections of Act No. 255 of the Public Acts of 1899. It is to put a stop to the carrying out of the unlawful agreements alleged in the replications, by preventing the guilty parties to the unlawful combination, of which the corporation is clearly enough alleged to be one, from continuing to carry on business in this State, whose laws it violates.

Does the statute infringe the Fourteenth Amendment ? It is urged that the statute violates the Fourteenth Amendment of the Constitution of the United States, in that the limit to which it will ‘permit interference with corporations is to punish or prevent unlawful acts by it, and it is asserted that the exclusion of corporations from the right of doing any business in the State is beyond legislative power. The authority of a State to impose conditions upon the privilege of doing business by foreign corporations is well established, and is not affected by the-Fourteenth Amendment to the Federal Constitution. See 8 Cyc. pp. 1058 and 1059, and authorities cited in notes 4, 5, and 6. Waters-Pierce Oil Co. v. Texas, 177 U. S. 28; Blake v. McClung, 172 U. S. 239; Philadelphia Fire Ass’n v. N. Y., 119 U. S. 110; Pembina Mining Co. v. Pennsylvania, 125 U. S. 181; Paul v. Virginia, 8 Wall. (U. S.) 168; Norfolk, etc., R. Co. v. Pennsylvania, 136 U. S. 118.

Is quo warranto a proper remedy? We have no doubt that a bill in equity would lie to restrain the unlawful acts of the corporation, done in furtherance of the purposes for which it is alleged to have been organized. See U. S. v. Joint Traffic Ass’n, 171 U. S. 567; Northern Securities Co. v. U. S., 193 U. S. 197. But proceedings in the nature of quo warranto are appropriate to try the right of a domestic corporation to act as such, and there would seem to be a close analogy between such a case and one where the proceeding is resorted to for the purpose of inquiry into the right of a foreign corporation to do business in another State than that of its organization, as it would be in the home State if the object was to inquire into a right to exercise franchises in excess of those granted. The following authorities indicate this, and. some of them relate to questions arising under statutes similar to ours: People v. Improvement Co., 103 Ill. 491; People v. City of Peoria, 166 Ill. 517; State v. Electric Co., 28 Wash. 490; State v. Somerby, 42 Minn. 551 State v. Insurance Co., 39 Minn. 538; State v. Water Co., 107 Wis. 442; State v. American Book Co., 65 Kan. 847; State v. Insurance Co., 47 Ohio St. 167 (8 L. R. A. 129); State v. Insurance Co., 49 Ohio St. 441 (16 L. R. A. 611); State v. Railroad Co., 116 Wis. 152; People v. Refining Co., 121 N. Y. 585 (9 L. R. A. 33); People v. Milk Exchange, 145 N. Y. 267 (27 L. R. A. 437); State v. Distilling Co., 29 Neb. 700; People v. Trust Co., 130 Ill. 268 (8 L. R. A. 497); Distilling, etc., Co. v. People, 156 Ill. 448.

We think it proper to say that the question “ whether the replications state a case under the statute of Michigan passed in 1899 ” is not raised by the motion, or passed upon in this opinion.

Our conclusion is that the motion to dismiss should he denied, with costs. Ordered accordingly.

Carpenter, C. J., and Grant, Montgomery, and Moore, JJ., concurred.


text:
    PEOPLE v. GARDNER.
    1.. Criminal Law — Appeal — Questions Considered — Prior Decision — Validity op Ordinances.
    A decision of this court, sustaining the validity of a city ordinance and affirming the conviction of a respondent prosecuted for its violation, must be regarded as settling the question whether the city may pass such an ordinance, when again called in question by the same person, on appeal from a subsequent conviction.
    , 2. Constitutional Law — Validity op Statutes — Motives op' Legislature — Judicial Inquiry.
    The motives of a legislature or of its members cannot be inquired into for the purpose of determining the validity of its enactments.
    3. Municipal Corporations — Ordinances — Validity — Motives op Council.
    The motives of a city council in adopting an ordinance, in the exercise of its legislative powers, cannot be,inquired into for the purpose of invalidating the ordinance, though fraud is alleged.
    4. Same — Ordinances—Violation—Prosecution—Evidence.
    On a prosecution for violation of a city ordinance regulating , the collection and disposal of garbage, evidence that the ordinance was not adopted in good faith for the protection of the public health, but for the purpose of creating a monopoly in the hands of the contractor, is not admissible.
    5. Same — Justification.
    It is no justification for the violation of a city ordinance that other violators are not convicted, or that those whose duty it is to perform the duties required by it have fallen short, through inattention or intentional omission or neglect.
    6. Same — Direction op Verdict.
    On a prosecution for violating a valid city ordinance, where the facts are undisputed and the only question on which respondent desires the verdict of the jury involves the validity of the ordinance, the court properly directs a verdict of guilty.
    7. Criminal Law — Trial—Instructions—Duty op Jury.
    Respondent in a criminal case has no right to an instruction that the instructions of the court are merely advisory, and that the jurors have the right to disregard them and return such a verdict as they think is right.
    Certiorari to recorder’s court of Detroit; Murphy, J.
    Submitted October 6, 1905.
    (Docket No. 17.)
    Decided March 5, 1906.
    James Gardner was convicted of violating a municipal ordinance relative to the disposition of garbage.
    Affirmed.

      Fred A. Baker, for appellant.

      Timothy E. Tarsney and Corliss, Leete & Joslyn, for the people.
   Hooker, J.

The defendant has been convicted a second time of violating a garbage ordinance of the city of Detroit. He questions the conviction upon two grounds: First, that the ordinance is void; second, that the court erred in directing a verdict of guilty.

That a city may lawfully pass an ordinance like this must be considered settled by the decision in the case of People v. Gardner, 136 Mich. 693, where this identical ordinance was held valid, and a former conviction of this defendant was affirmed. See, also, Fischer v. St. Louis, 194 U. S. 361.

Upon a prosecution for a second offense, his counsel claimed the right to show by testimony that the ordinance was not passed in a bona fide attempt to conserve the public health, but to create a monopoly for the benefit of the Detroit Sanitary Works, a concern to which was granted the exclusive right to remove garbage from the city. The testimony offered was, in substance, that said company did not, and could not, with the teams and men actually employed, thoroughly do the work contracted, and that complaints made were not investigated or acted upon by the city authorities. That this was known to be inevitable by the council, when the ordinance was passed, because the same conditions existed under one or more former contracts with the Detroit Sanitary Works.

Upon the trial of the former case, it was claimed that the ordinance was void because unreasonable, and therefore the question must have been passed upon. The only difference between that record and this, so far as they relate to this point, is that in the former case the opinion states that the facts were not in dispute, while upon the trial of this case counsel offered to show the facts before mentioned, and was not permitted to do so. As stated, we have held that the ordinance is valid upon its face, and, were it clear that the question is before us, we should not hesitate to say that there is nothing in the ordinance that is impracticable or unreasonable in itself.

The question of fraud: Counsel offered to produce testimony which he said would tend to show that the purpose of the council was fraudulent, and to create a monopoly of the garbage business in the hands of the contractor. We have alluded to the fact that, in passing ordinances, a common council acts under delegated authority, as an inferior legislative body. Nothing is better settled than the rule that the motives of a legislature or of the members cannot be inquired into,, for the purpose of determining the validity of its laws. See Doyle v. Insurance Co., 94 U. S. 535, and cases cited in McQuillin on Municipal Ordinances, § 161. That author says:

“The general rule is well established that courts will, not inquire into the motives of legislators where they possess the power to do the act, and it has been exercised as. prescribed by the organic law. In such case the doctrine, is that the legislators are responsible alone to the people who elect them. And this principle is generally applied to purely legislative acts of municipal corporations. In passing an ordinance legislative in character, relating te the police power and importing no private contract or right, ‘ the members of the city council are entitled to the same privileges and prerogatives which belong to members of the State legislature.’ Neither the motives of the members, nor the influences under which they acted, can. be shown to nullify an ordinance duly passed in legal form, within the scope of their corporate powers.
“ ‘ The legality of the acts of legislative or of corporate bodies cannot be tested by the motives of the individual members, or the adventitious circumstances they may lay hold of to carry their measures, provided they proceed regularly and act within the scope of their powers. If they be regularly convened, if the purpose be lawful, and if their acts are passed in due form of law and within the scope of their authority, persons who lend their money on the faith of such acts, or do other lawful things in a just reliance upon their validity, cannot be affected by the secret springs of corporate action, and the public faith cannot be tarnished by the unseen influences surrounding it.’ Borough of Freeport v. Marks, 59 Pa. 257.”

The case of Soon Hing v. Crowley, 113 U. S. 703, 710, is in point, where, in considering a police ordinance, Mr. Justice Field, with the approval of his associates, said:

“ The rule is general, with reference to the enactments of all legislative bodies, that the courts cannot inquire into the motives of the legislators in passing them, except as they may be disclosed on the face of the acts, or infer-able from their operation, considered with reference to the condition of the country and existing legislation. The motives of the legislators, considered as the purposes they had in view, will always be presumed to be to accomplish that which follows as the natural and reasonable effect of their enactments. Their motives, considered as the moral inducements for their votes, will vary with the different members of the legislative body. The diverse character of such motives, and the impossibility Of penetrating into the hearts of men and ascertaining the truth, precludes all such inquiries as impracticable and futile.”

Mr. Dillon questions the application of this rule to cases involving municipal ordinances. 1 Dillon on Municipal Corporations (4th Ed.), § 311. He says:

“It is well settled that the judicial branch of the government cannot institute an inquiry into the motives of the legislative department in the enactment of laws. Such an inquiry would not only be impracticable in most cases, but the assumption and exercise of such a power would result in subordinating the legislature to the courts. In analogy to this rule it is doubtless true that the courts will not, in general, inquire into the motives of the council in passing ordinances. But it would be disastrous, as we think, to apply the analogy to its full extent. Municipal bodies, like the directories of private corporations, have too often shown themselves capable of using their powers fraudulently, for their own advantage or to the injury of others. We suppose it to be a sound proposition, that their acts, whether in the form of resolutions or ordinances, may be impeached for fraud at the instance of persons injured thereby.”

It is noticeable that he supports the first proposition of his text by the citation of Cooley on Constitutional Limitations (7th Ed.), pp. 257, 258, where many cases are collected, but expresses the opinion that the acts of a council “may be impeached for fraud at the instance of persons injured thereby. ” No authority supporting this opinion is cited, except it be the case of State v. Gaslight & Coke Co., 18 Ohio St. 262. That case recognizes the rule, and says:

“ As the legislature is a co-ordinate branch of the government, the jurisdiction of the judiciary to declare its acts of legislation within its constitutional sphere invalid on account of the improper motives which induced their enactment may well be denied. And the same rule should, perhaps, govern in the case of an ordinance passed by a city council in the exercise of the legislative powers conferred upon it for the purposes of police regulation, or municipal government. But this immunity from impeachment for fraudulent motives, or abuse of power, does not attach to all the acts of a city council which may assume the form of an ordinance.”

This distinction is sufficient to except the present case from the rule there applied, but the case has little support. The suggestion of Dillon has not received the approval of the courts or jurists of the country. Of the general subject Mr. Justice Coojcey says, in Constitutional Limitations (7th Ed.), p. 257:

“From what examination has been given to this subject, it appears that whether a statute is constitutional or not is always a question of power — that is, a question whether the legislature in the particular case, in respect to the subject-matter of the act, the manner in which its object is to be accomplished, and the mode of enacting it, has kept within the constitutional limits and observed the constitutional conditions. In any casein which this question is answered in the affirmative, the courts are not at liberty to inquire into the proper exercise of the power. They must assume that legislative discretion has been properly exercised. If evidence was required, it must be supposed that it was before the legislature when the act was passed; and if any special finding was required to warrant the passage of the particular act, it would seem that the passage of the act itself might be held equivalent to such finding. And although it has sometimes been urged at the bar that the courts ought to inquire into the motives of the legislature where fraud and- corruption were alleged, and annul their action if the allegation were established, the argument has in no case been acceded to by the judiciary, and they have never allowed the inquiry to be entered upon. The reasons are the same here as those which preclude an inquiry into the motives of the governor in the exercise of a discretion vested in him exclusively. He is responsible for his acts in such a case, not to the courts, but to the people.”

He has cited innumerable cases in support of the text, and, upon page 305, has distinctly applied the rule to municipal ordinances in the following language:

“ And the same presumption that legislative action has been devised and adopted on adequate information and under the influence of correct motives will be applied to the discretionary action of municipal bodies, and of the State legislature, and will preclude, in the one case as in the other, all collateral attack.”

The note in connection with the foregoing indicates that the Ohio case above cited was not overlooked. From what has been said it should be inferred that the testimony offered was not proper for the purpose of showing fraudulent action by the council.

. The validity of the ordinance does not usually depend on a completely successful enforcement of its provisions, nor can one who violates it be discharged, merely because it is shown that there are other violators who have not been convicted, or that those whose duty it is to perform the duties required by it have fallen short, through inattention or intentional omission or neglect.

We understand that the questions before us are two: (1) Had the defendant a right to have this proof go to the jury? (2) Should the court have directed a verdict‘of guilty ? To the first the answer is in the negative.

Was it error for the judge to direct a verdict of guilty ? Before the case was submitted to the jury, the court said:

The Court: The facts in this case, as T. see it, are not disputed.
“Mr. Baker: I claim they are.
“The Court: The facts which are in evidence are not disputed.
Mr. Baker: I desire to go to the jury upon the question whether the Detroit Garbage Works performs this work. I will put it in this form: Upon the question whether the collection is equal to one-half of the city upon the minimum of service required by the contract. I want the verdict of the jury upon t-hat question under the evidence.
‘ ‘ The Court: I do not think you are entitled to a special verdict in a criminal case. This being of the nature of a criminal case, are you entitled to anything other than a general ruling ?
“Mr. Baker: No, they can’t be compelled to render a special verdict; but they may render one; and, of course, although the verdict may be general, it will have reference to and be based upon the instructions of the court. And a general verdict would be an answer — although it is a verdict' of guilty or not guilty — it would be an answer to the question that the court ought to leave to the jury. And, upon the evidence that I have introduced here, I have a right to go‘to the jury, and to take their view of the evidence — their judgment upon the evidence whether this contract is being performed or not. And my proposition to the court is: Under the evidence in this case they do not do half this city, at ithe minimum amount of service required by the contract. I have the figures in here that show it. You can assume that to be the fact or take the opinion of the jury upon it.
The Court: What are the conceded facts with reference to the alleged violation of the ordinance, by the respondent ? .
“Jin Baker: There is no disputing the fact that we carry garbage through the streets, and we are not the contractor.
“Mr. Corliss: You are not authorized by the city so to do.
“Mr. Baker: No, sir, we are not authorized by the city; don’t claim any such authority.
“The Court: I take it that these facts are conceded: That in pursuance of its power the city entered into a contract with the Detroit Sanitary Works, assuming to give the sanitary works exclusive right to collect and remove garbage within and from the city; after that contract had been executed, this defendant, upon the day named in the complaint, did collect and transport through the streets of the city such stuff as is, within the purview of the ordinance, garbage. And, at that time, he was not a contractor authorized so to do.
Mr. Baker: There is no question about that. Our dispute relates to the validity of the ordinance and the contract. And, under the evidence, I claim the right to take the opinion of the jury upon any controversy that may arise in regard to the evidence.
The Court: If there be a question of fact for the jury.
“Mr. Baker: And also, upon this question I desire to take the opinion of the jury, under the evidence in this case: Whether the contract was entered into in good faith on the part of the common council of this city, to protect the public health ? I claim that it was not.
The Court: Upon these questions you claim the right to go to the jury: First, upon the question whether or not the company is performing the work called for by the contract; and, secondly, as to the good faith of the common council in contracting for this work ?
Mr. Baker: Yes — that is, to take their opinion upon the question whether it is a good faith contract, or whether it is a mere cloak or pretext to give the garbage works— the sanitary works, this garbage. I think, under the evidence, upon those questions, I have a right to go to the jury
The Court: I do not think so, Mr. Baker; and that being my view, I will state it to the jury, and then you may take an exception.
Mr. Baker: I put it in that form, if the court please, so as to make up a record'; but I expected thát your honor would rule against me. But I take an exception just the same. I also desire to address the jury upon this question: Whether or not they are bound to take the instructions of the court.
“ The Court: Isn’t that settled in this same case ?
Mr. Baker: No, not in the form in which I want to see it.
The Court: What new phase is there as to that ?
Mr. Baker: I will ask your honor to instruct the jury that your advice in this case is merely advisory; that it is within the power of the jury to disregard your instructions, and to render such verdict as they think is right upon their honor and their consciences. I would like to have the jury instructed that if any one of them should refuse the court’s instructions, that there is no power, under our law in the court or elsewhere, to punish them for contempt of court. * * * And I ask your honor to instruct them that your instructions are merely advisory; that they cannot be compelled to render a verdict in accordance with your instructions ; that it is a matter of honor, and conscience, and judgment upon their part; and that, if they disregard the instructions, there is no power to subject them to any punishment whatever for their verdict. * * *
The Court: I haven’t passed upon it yet. I ask you, I say; do you concede the law in this State now is not as you claim it to be, under the decision given in this very case ?
Mr. Baker: I do not concede it. The court has said that the trial judge may direct a verdict; but they have not said that the jury are bound by it; or that they can be punished if they do not obey it. They have not said that. That is what I want to argue the question upon.
The Court: Well, gentlemen of the jury, by far the most important question suggested in this case is the one just referred to by Mr. Baker. He asks that the court say to you that any instructions upon the law of this case now given you are not obligatory upon you, but are simply advisory. In a case that is strictly a criminal case, of course that is not the law, never was the law, never will be the law. In a case which is strictly criminal in character, where there is a prosecution for the commission of an alleged crime, the instructions given by the court are as binding upon the jury, under the oath, as any obligation they can take. The case at bar, upon which you are now sitting, is not strictly a criminal case. It is a case brought for the violation of the city ordinance. A city ordinance is not a law of the same character as a statute. It is merely a regulation; a rule of conduct passed by the common council for the direction and supervision of its citizens. But, while it is not criminal in character, it partakes in its nature of the character of a criminal case. Because of the difference between a prosecution brought under an ordinance, and a prosecution brought under a statute, it was urged upon the trial of this respondent in a former case, under this same ordinance, that the court could not do more than advise the jury what the law is; that he had no right to say the law is so and so, and it becomes your duty to take the law as such. When that question was presented to me before, I took the view that in a case of this kind, no less than in a strictly criminal case, the functions of the court and the jury are separate and distinct; the court being permitted to act within its sphere, and the jury being permitted to act within their sphere; the jury being the sole judges of the fact, and the court being the sole judge of the law. And my view upon that was upheld by the Supreme Court in the case taken there upon a conviction rendered here against this respondent. I take it that this is the law. And that being my view, I say to you that in this case it is your obligation, under your oaths, to take the law as it is given you by the court, and to follow implicitly and scrupulously. If a juror refuses to take the law from the court, another situation arises. I am not prepared to say what the power of the court in that event would be. I have not given it sufficient study to say. The general doctrine, of course, is, that when a duty is vested in a court — when power is given to a court, there goes with the power all the implied authority to make that power effectual. Otherwise, of course, the power of the court might be nullified. If the legislature of the State vested a certain authority or jurisdiction in a court, or say to a court, you have not only the power, but the right and the duty to act in this manner, there necessarily is included within that jurisdiction authority to make its power effectual. But further than that I am not at this time prepared to say what redress a court would have if a jury or a juror should refuse to obey the instructions of the court.
“ So much for that phase of the matter. I charge you, as a matter of law, that it is mandatory, obligatory upon you to take the law in this case as the court declares it to be. Now, that being so, what is the issue here presented? The common council of this city has been authorized by the legislature to enter into an exclusive contract, if it so desires to, with anybody, for the collection and removal of garbage. In pursuance of the authority so conferred upon the council by the legislature, the common council of this city has passed an ordinance, under the terms of which a contract has been entered into with the Detroit Sanitary Works, giving to that company the exclusive right and duty of collecting and removing garbage within the city of Detroit. Now, that power of the council, gentlemen of the jury, to give an exclusive right to any individual or company or firm, is a lawful power. While it gives to the company an exclusive right, that exclusive right does not violate any other individual rights; or, if it does violate them, it is such a violation as is necessary for the common good. You-will readily see at once, gentlemen of the jury, that if the collection of garbage and if the removal of garbage is necessary to preserve the health of the people of this city, such a system ought to be devised as will be effectual. And it is not going too far to ■say that in order to have an effectual removal of garbage, there must be some supervision over it. Now, the common council having the authority to give to one person the exclusive right to remove the garbage, if it sees fit to do so, and having exercised its discretion by saying that, in its judgment, the best way of collecting and removing garbage is to give that right to one person, it is not within your power, gentlemen of the jury, to sit in judgment of the common council, and say that their act in that regard was not a proper exercise of their discretion.
“ We cannot substitute a jury, gentlemen, for the common council of the city of Detroit. And the Supreme Court of this State upheld this ordinance, and said the common council has the right to give that sole privilege to any one person if it seems best so to do. Now, that was done by the common council; and after that contract was let, this respondent collected garbage and removed it in violation of the terms of the ordinance. Whether this company is living up to its contract is not material to this case, gentlemen. If this company is not doing its duty under that contract, it does not furnish this respondent a right to violate the ordinance. Two wrongs never made a right; and the wrong of this company, if there is a wrong, does not justify this defendant in doing wrong. So that on the question which was urged by Mr. Baker, that you ought to be permitted to say by your verdict whether or not the company is performing its contract, I say to you that you have no right to consider that, because it is not material to this case. It in no way justifies the defendant, if he be guilty of a violation of the ordinance, to say that the company is not doing what it contracted to do.
“As to the other phase of the matter, it has been urged that you had a right to say that the intent or purpose of the common council in entering into this contract was not a legitimate one. It has been said that the common council, in entering into this contract with this ■company, must have known that this company could not perform what it contracted to do. As to that, I say, gentlemen of the jury, that is entirely foreign to this case. There is a way of enforcing the performance of that contract. The city of Detroit is a party tQ it, upon the one Band, and the company is a party, upon the other hand. I take it that any citizen of the community may invoke the operation of the law to enforce the full performance of that contract. Even if that cannot be done, there are other ways in which the company can be compelled legally and properly to carry out what it has contracted to do.
“ In any event, you have no right, as I view it, to sit in judgment upon the intent of the common council of this ■city in the performance of purely legislative act, which they did in a case of which they had undoubted jurisdiction.
“That being my view upon the law, gentlemen of the jury, I say to you that there is no question of fact for you to consider in this case. It is conceded that the respondent ■violated the terms of the ordinance. The ordinance is a valid one, and I, therefore, say to you, gentlemen of the jury, that it becomes your duty to return a verdict of guilty as charged.”

The foregoing dialogue shows that the violation of the terms of the ordinance was admitted, and that the only questions upon which a verdict was sought by the defendant were those bearing upon the validity of the ordinance. In such a case it has been held that the court may properly direct a verdict of guilty, even in a criminal case. We are cited to the case of People v. Remus, 135 Mich. 629, upon the point that this was error. It is deducible from the opinion in that case that the court assumed to decide as a fact a question that was not admitted, or even conclusively proved; the jury having the right to disbelieve certain testimony. That case shows that we have decided that admitted facts would authorize the direction of a verdict. People v. Richmond, 59 Mich. 570; People v. Kirsch, 67 Mich. 539; People v. Neumann, 85 Mich. 98; People v. Repke, 103 Mich. 459; People v. Hawkins, 106 Mich. 488. While this is true, the case of People v. Collison, 85 Mich. 105, may appear at first blush to give support to defendant’s claim that the jury should be instructed that the judge’s opinion and instructions regarding the law may be disregarded. In that case it was held that, although the judge might lawfully have directed a verdict of guilty, directing the clerk, in the presence of the jury, to enter such a verdict was error. Technically the defendant should have had the verdict rendered by the jury. The following language is now relied upon to support counsel’s claim that the defendant had the right to have the jury told that they might disobey the instructions of the court if they should choose to do so:

In the case of People v. Neumann, 85 Mich. 98, and in the several cases therein referred to in support of the conclusion arrived at there, the jury acquiesced in the direction of the court; but here the court gave the jury no opportunity to follow, or to refuse to follow, the court’s direction; in fact, there was no direction to the jury, but one to the clerk to enter a verdict.”

We understand that this is not what was meant, which was merely to strictly enforce a technical right; to have the verdict rendered by the jury. It has been held in many cases that the jury is to receive the law from the court, and that it is the duty of the jurors to follow instructions in that regard. See Hamilton v. People, 29 Mich. 175; People v. Mortimer, 48 Mich. 37; People v. Hawkins, supra; State v. Burpee, 65 Vt. 1 (19 L. R. A. 145). It would be anomalous, in the light of these decisions, to put a premium upon disregard of duty, by emphasizing the physical power of the jurors to disregard the law and their clear and well-settled duty.

It is suggested that the facts were not admitted, i. e., that the existence of a valid contract for the collection of garbage was not admitted. The contract was in writing, and was not questioned, except as the ordinance was questioned, and these questions have been discussed.

The judgment is affirmed.

Carpenter, C. J., and Grant, Montgomery, and Moore, JJ., concurred.


author: Grant, J.

text:
    COBE v. SUMMERS.
    1. Appeal and Error — Brief—Statement of Pacts — Presumption of Correctness.
    Where appellee points out no incorrectness in the statement of the case made by appellant, it will be accepted as correct, though appellee also makes a statement.

      2. Building and Loan Associations — Contracts—Construction —What Law Governs.
    A note and mortgage executed in this State, by residents of this State, on lands situated in this State, in favor of a building and loan association, organized under the laws of another State, on which payments were made to local agents who, while not expressly provided for by the articles of association of the loan company, were recognized by it, constitute a Michigan contract which is governed by our laws respecting usury.
    3. Same — Loans—Competitive Bids — Usury.
    Where the record of the proceedings of a building and loan association, with respect to making a loan, does not show that the by-laws requiring competitive bids and notice of opening to bidders were complied with, any payments on the loan or on the stock amounting to more than the legal rate of interest will be deemed usurious.

      4. Usury — Mortgages—Estoppel to Plead — Grantee of Mortgagor.
    Where the grantee of a mortgagor receives the benefit of no* part of the usury complained of he is not estopped to set it up as a defense to foreclosure of the mortgage.
    Appeal from Montcalm; Davis, J.
    Submitted November 15, 1905.
    (Docket No. 138.)
    Decided March 5, 1906.
    Bill by Ira M. Cobe against Jacob G. Summers and others for the foreclosure of a mortgage. From a decree dismissing the bill, complainant appeals.
    Affirmed.
    No objection being made to the statement of the'case by complainant and appellant in his brief, it will be taken as correct. Counsel for appellee has also made a statement. The rule, however, requires the appellee to point out, wherein the statement of the appellant is incorrect if he disputes it. The statement is substantially as follows: The bill of complaint was filed to foreclose a mortgage executed by defendant Jacob G. Summers and his wife, Mary, to the North American Savings, Loan & Building Company, dated January 23, 1890. That association was a corporation organized under the laws of Minnesota, with its principal place of business at St. Paul. Its manner of transacting business was provided by the laws of that State and the by-laws of the corporation. December 14, 1889, defendant Jacob G. Summers bid for a loan of $2,000, in which bid he agreed to hold 40 shares of stock in said corporation, and to pay installments on said stock until the same shall mature or the loan be paid. He further agreed to pay a bonus of 50 per cent, of the 40 shares of stock as a consideration for the loan of $2,000. Decern-' her 18th he made a written application for a loan of $2,000, giving a description of the land, and a statement of its value, mortgages, taxes, and condition. January 4, 1890, the corporation executed and delivered to Mr. Summers a certificate for 40 shares of the stock. The certificate recited that he was to pay installments of 60 cents per share, payable to the treasurer of the company in St. Paul. Fifty-two cents of each monthly payment was to be paid on account of the loan fund, the remainder and all fees to go into the general or expense fund. The certificate contained many other statements unnecessary to mention. On January 23, 1890, Mr. Summers and wife executed the mortgage in question, and he gave an obligation reading as follows:
    “$2,000.00. Sheridan, Michigan, January 23, 1890.
    “After three years from date and before nine years from date, and at the time when stock numbered 725 in the North American Savings, Loan & Building Company of Saint Paul, Minnesota, shall be matured, I promise to pay to said company at Saint Paul, Minn., the sum of two thousand dollars, value received, with interest on said sum from the date of the application for loan, December 18, 1889, until the maturity of said stock and the payment of said sum at the rate of six per cent, per annum. Interest to be paid on or before the second Tuesday of each and every month until the maturity of the stock. Upon default being made in the payment of any installment of interest, the whole principal sum and interest to become due.”
    The mortgage contains the following:
    “ This mortgage being given to secure a loan on forty shares of stock in said North American Loan & Building Company ^ the monthly payments on which amount to $24 per month; said parties of the first part do further covenant and agree to make the said monthly payments on said stock as they shall become ,due until said stock becomes fully paid in, together with all fines that may accrue thereon.

      “ Provided, nevertheless, That if the said parties of the first part, their heirs, executors, administrators or assigns, shall well and truly pay or cause to be paid to the said party of the second part, its successors or assigns, at the office of. its treasurer at St. Paul, Minnesota, or at th.e office of its trustee at Minneapolis, Minnesota, two thousand dollars and interest according to the conditions of one promissory note executed by Jacob Gr. Summers, one of said parties of the first part to said party of the second part, bearing even date herewith, payable after three years from date and before nine years from date, and at the time when stock numbered seven hundred and twenty-five in the North American Savings, Loan & Building Company shall be mature, with interest on two thousand dollars before and after maturity at the rate of six per cent, per annum until paid,.interest payable monthly, or shall pay or cause to be paid to the treasurer of said company all installments of interest which become due on said note, and all fines and monthly payments which become due on said stock until said stock becomes fully paid in, and of the value of $100 per share, and before any of said installments of interest or mo'nthly payments shall have been past due for a period of three months, and shall then surrender said stock to said company in payment of said note, then this deed shall be null and void, otherwise to remain in full force and effect.”
    Aside from the above statement, the mortgage is in the usual form. This mortgage was duly recorded. September 26, 1891, Summers and his wife deeded the lands, subject to the mortgage, to defendants Sanders and Bark-ham.
    The company subsequently became insolvent, and a decree was entered in the proper court of the State of Minnesota declaring it insolvent and appointing a receiver. An order was made authorizing the receiver to sell, transfer, and assign certain assets of the corporation, including the mortgage in question, to Cobe and McKinnon. Subsequently, and by virtue of that order, the receiver executed to the complainant an assignment of the mortgage in question. The defendants Summers made no defense, and as to them the bill was taken as confessed. The other defendants answered, and the case was heard upon pleadings and proofs taken in open court, and the bill dismissed on the ground (1) that the mortgage and note were executed in Michigan, and constitute a Michigan contract; (2) that they were and are usurious; and (3) that the'defendants have paid them in full.
    We deem it essential to make the following additional statement: On the back of the certificate of stock is a long agreement made between the Savings, Loan & Building Company and the St. Paul & Minneapolis Mortgage, Loan & Trust Company, by which the trust company is made the trustee of the building company for purposes unnecessary to mention. The certificate was never in the possession or control of defendant Summers. It was produced when the mortgage was executed, and his indorsement made thereon assigning it back to the company of which 20 shares were absolutely assigned as a bonus for the loan. The method of business is thus described in the deposition of the receiver:
    “Twenty shares were assigned to the company absolutely to become the property of the company as a premium or bonus for the loan, bid by the borrower, Mr. Summers. The other 20 shares were assigned to the company as collateral, to be held until the loan was paid. It was expected that the loan would be paid by this last 20 shares maturing.
    “ Q. Who was to pay the dues upon these 40 shares of stock ?
    ‘ ‘ A. The borrower, Mr. Sunimers, both on the premium and collateral stock. He was to pay these dues until the loan was paid by the terms of his mortgage and note.”
    The defendants, according to the receipt book held by the local agents, to whom payments were made, made 84 payments of $10 each as interest, 83 payments of $24 each without specifying upon what they were made, and one payment of $8, showing a total of $2,840.
    Counsel for the complainant states his claim and account as follows:

      Amount of dues paid on 20 shares of premium stock, 84 months at $12 per month, less $300. __ $1,005 00-
    Amount of interest paid, 82 months at $10 per month........................................ 820 00-
    Total interest and dues on premium stock paid.. $1,825 00 Deduct interest accrued on face of loan on Jan.
    13, 1898, as above............................. 1,120 00
    Balance of dues on premium stock and interest to
    apply on face of loan__________________________ $705 00>
    Interest on $705 being above balance of premium and interest to apply on principal of loan, for average time 54-1 months at 7 per cent. -.......- 224 12
    Membership fee on 20 shares of premium
    stock..-............................... $20 00
    Interest on above membership fee from date when paid, to Jan. 13, 1898........ 11 20
    Total membership fee and interest.............. 31 20
    Total to apply on principal of loan.............. $960 32

      Summary.

    Face of loan............................ $2,000 00-
    Total.........................-.................$2,000 0»
    Less amount to apply on loan as above__________ 960 32
    Balance-due on loan Jan. 13, 1898..............$1,039 68-
    Amount of complainant’s claim............. $1,039 68
    Interest from Jan.' 13, 1898, to date of decree____ 495 39
    Total.............. $1,535 07

      L. C. Palmer, for complainant.

      Frank A. Miller and V. H. & L. W. Smith, for defendants.

       As to usury in loans by building associations, see note to Reeve v. Ladies’ Building Ass’n (Ark.), 18 L. R. A. 129.

   Grant, J.

(after stating the facts). The fact® in this case as to the time, place, and manner of execution of the mortgage and note involved are the same as those it National Mut. Bldg. & Loan Ass’n v. Burch, 124 Mich. 57, and Hoskins v. Loan Ass’n, 133 Mich. 505. The fact that the local board organized at the home of the defendants in Michigan was not expressly provided for in the articles of association of the building and loan company does not affect the question. Such local agent was evidently recognized by the company, and the payments were all made to its local agents. The contract was therefore a Michigan contract under the above authorities. See, also, National Mut. Bldg. & Loan Ass’n v. Retzman, 69 Neb. 667.

A rather strict compliance with the law is required of these building and loan associations whose rules and methods of business are difficult for at least the average lay mind to readily comprehend. When, therefore, they seek to obtain more than the legal rate of interest under the plea of subscriptions to stock, bonuses, bids for loans, fines, etc., they must show that in making these loans 'they have complied with the provisions of the law under which they are operating. Sections 10 and 11 of article 3 of the by-laws of the association are as follows:

“Sec. 10. All applications for loans shall be made in writing on blanks to be furnished by the company, and all required questions must be fully answered.
“ Sec. 11. All members filing applications shall have the privilege of bidding for loans. Bids shall be opened on the second Tuesday in each month and on such other days as the directors may appoint.
Whenever the board is prepared to make a loan, a notice stating the time when the bids shall be opened, shall be sent by mail to every applicant at least fifteen days before the daj for opening the bids.”

These by-laws, therefore, require the making of competitive bids which shall be opened at specified times, and notice when they are to be opened to be sent to the applicant. There is no evidence in this record to show that this was done, and it cannot rest upon presumption. Where this provision has not been complied with and the payments made are more than the legal rate of interest, the contracts are held usurious. Myers v. Building Ass’n, 117 Mich. 389. In that case a minimum premium was required in contravention of the law; See, also, Clarke v. Connors, 18 S. Dak. 600; 6 Cyc. p. 149; Wightman v. Suddard, 93 Ill. App. 142.

Defendant Summers testified that he wanted a loan of $2,000 and talked with the company’s agent about it, and they talked about the stock, and that the agent told him:

“ If I borrowed it in that way, I could pay it in three years. I could pay it all up in three years. * * * Hayes [the company’s agent] did all of this business for me. He made this loan. It was talked over with him and with the agent, and the understanding was, when I paid the $2,000 and interest, that was all there was of it.”

It is quite manifest that Summers understood, and he had good reason to so understand, that, when he had paid this loan, he was entitled to some stock, and that he did not understand that he was to pay $4,000, $2,000 for his mortgage and $2,000 for stock. Complainant seeks to apply $12 per month under the contract on the bonus stock in which defendants in fact had no interest whatever. For what purpose 40 shares of stock should be issued in the name of Mr. Summers, and 20 shares immediately assigned back to the company, is rather incomprehensible to me. At all events, Summers was required, under complainant’s theory, to pay $12 per month upon stock in which he had no interest. Defendants have paid considerably more than 6 per cent, on the loan. They paid 6 per cent, a year for many years on $2,000, when, in fact, they received only $1,860. Under the above authorities, and under National Mut. Bldg. & Loan Ass’n v. Burch, and Hoskins v. Loan Ass’n, supra, the contract must be held usurious.

It is next urged that defendants Sanders and Bark-ham are estopped to set up the defense of usury because they took the deed subject to the mortgage. In making the deed, both the grantor and the grantees treated this mortgage as securing only the loan of $2,000, and the defendants Sanders and Barkham purchased it, paying the value of the land less the amount which Summers had actually paid thereon. Where the grantee has received as a part of the consideration the benefit of the amounts claimed to be usurious, the law estops him to set up usury. But where such amount has not been deducted from the purchase price, he is not estopped. National Mut. Bldg. & Loan Ass’n v. Retzman, supra; Crawford v. Nimmons, 180 Ill. 143; Berdan v. Sedgwick, 44 N. Y. 626.

The decree is affirmed, with costs.

Blair, Montgomery, Ostrander, and Hooker, JJ., • concurred.