text:
    FROHLICH v. INDEPENDENT GLASS CO.
    1. Sales — Breach of Contract — Excuses.
    In an action for breach of a contract, defendant was not entitled to show, as an excuse for not shipping goods ordered, pursuant to agreement, that plaintiff had neglected or refused to pay an old account, as tending to prove a fraudulent attempt to'secure the goods without any intention to pay for them; where its refusal to perform was not based on such a reason and no testimony excluded had any tendency to show that such was the true reason for refusing to perform.
    2. Same — Damages.
    Prejudicial error did not appear from the charge of the court to the effect that plaintiff was not required, in mitigation of damages, to buy of any manufacturer not known to him in the ordinary course of his business, under undisputed testimony that there was only one concern of sufficient capacity that would fill his order at the time, and he purchased the goods of it.
    Error to Wayne; Rohnert, J.
    Submitted November 18, 1912.
    (Docket No. 104.)
    Decided December 17, 1912.
    Assumpsit by Simon Frohlich against the Independent Glass Company for breach of contract. After plaintiff’s decease, Edward Frohlich and Hannah Frohlich, his executors, were substituted as plaintiffs. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Julian G. Dickinson, for appellant.

      Lucking, Emmons & Helfman, for appellees.
   Ostrander, J.

Plaintiff sued defendant for damages arising out of the failure of defendant to fill an order for glass according to contract. Upon a former trial, plaintiff recovered a sum less than he demanded. The judgment was reversed by this court. Frohlich v. Glass Co,, 144 Mich. 278 (107 N. W. 889). Simon Frohlich, the original plaintiff, died, and the suit was revived in the name of his executors. Upon the last trial, the record of which is now before us for review, plaintiffs recovered a much larger verdict and judgment, and defendant alleges errors. The opinion of this court upon the former hearing contains a sufficient statement of the issues. With a single exception, to be hereafter noticed, no new issues have been introduced ^ into the case and no questions of law not considered and disposed of in our former opinion. We then held that the reason which defendant gave for its failure to perform its contract was insufficient. It is objected that the trial court refused to admit in evidence the correspondence in which the reason was contained and other correspondence between the parties. The correspondence was that offered and received upon the former trial, is contained in the record, and has been examined. The reason given for not filling plaintiff’s orders was “simply and solely because you refuse to pay the overdue account owed by your Detroit and Toledo houses to this company.” In the former opinion it was said that “nothing short of a breach of contract or actual insolvency would excuse the defendant from fulfilling the contract on its part.” Neither of these things was attempted to be shown, and no testimony tending to prove it was excluded.

It is contended that the correspondence and the interrupted cross-examination of plaintiff’s assignor tended to prove, and should have been admitted to prove, that it was justified in refusing to deliver the glass, and that a claim of rebate made by plaintiff and his course of dealing indicated the fraudulent purpose to procure the glass and to pay neither for it nor for glass furnished on old account; that at least it justified defendant in refusing to perform its contract unless plaintiff would pay existing indebtedness. We shall assume, as is contended in behalf of appellant, that if the glass had been delivered, and it had then been ascertained that it was purchased with an intention to never pay for it and to defraud defendant, the contract might have been upon that ground rescinded and possession of the glass recovered. But no such reason was given for refusing to perform the contract, and the excluded testimony does not tend to prove that it was the real reason for such refusal. We adhere to our former rulings, and, without particularly stating the errors assigned upon this record, find them disposed of by the prior decision.

The single exception, heretofore noted, is a point raised upon that portion of the charge of the court:

"If somebody of whom he (Frohlich) had no knowledge or of whom he would not know or be acquainted in the ordinary course of his business or in the ordinary course of getting glass for his business, if such a person had glass, the price at which that person would sell it would not establish the market price for him. It would be established by the usual sources from which he had been accustomed to go out and get glass.”

It is said of this, among other things:

" There are no legal restrictions of evidence as to the market value to the plaintiff’s usual sources of supply. * * * The evidence from any source of supply as to the market value of such glass applicable under the evidence to the time and place of delivery was admissible in evidence to establish the true market value of the glass.”

As it is stated the position of counsel for appellant is undoubtedly a proper one.

The portion of the charge which is quoted must be read in connection with its context and considered with reference to the testimony. The court said:

" What any one else would have had to pay in open market to buy that glass. The market value is to be ascertained by the conditions and facts and circumstances which surround the buyer in his attempt to buy glass in the open market at that time. It is your duty to take into consideration what sources of supply were open to the plaintiff on that day and the knowledge which the plaintiff had as to such sources of supply, the prices which the plaintiff would be compelled to pay for the same, and all other facts and circumstances which would affect the purchase of such on the market on this day. It is not the duty of the plaintiff in attempting to buy glass to find every possible person who might sell it, but he is bound to go to those places which are sources of supply for people in buying glass like himself, or such as he had been accustomed to go to get glass from. In determining what is the source from which he could buy glass or what anybody could go out and buy it for in the open market. In other words, I charge you, gentlemen of the jury, that if somebody of whom he had no knowledge or whom he would not know or be acquainted in the ordinary course of business or in the ordinary course of getting glass for his business, if such a person had glass, the price at which that person would sell it would not establish the market price for him. It would be established by the usual sources from which he had been accustomed to go out and get glass, from which it would be expected that he would go out and get glass.”

The distinction which the court made was dictated by the testimony which was before the jury. Plaintiff used a large quantity of glass; he gave to defendant a large order. The testimony, and it does not appear to be disputed, tended to prove that the output of glass was practically controlled by three concerns — combinations— namely, defendant, the American Window Glass Company, and the Federation. There were some outside factories, having a limited production, but none which could have filled plaintiff’s order for 15,000 boxes of assorted sizes and different qualities of glass. The combinations controlled the market and the price. They let their fires go down in June and again begin production in September or October. The Federation had oversold its product, the defendant would not sell to plaintiff, and it, too, had oversold its product. The American Window Glass Company sold to plaintiff some glass in July. Other dealers who bought from it paid the same price that plaintiff paid. The charge might well have been more specific; but, in view of the testimony to which reference has been made, we are of opinion that the jury could not have failed to appreciate the reason for the distinction stated, and the effect to be given to the instruction.

We are not satisfied that reversible error was committed, and therefore affirm the judgment.

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


source: Caselaw Access Project

author: Stone, J.

license: Public Domain

text:
    O’BRIEN v. EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES.
    Insurance — Guaranty of Surplus — Policy.
    Where defendant insurance corporation furnished for the use of its agents as an illustration of the working of a tontine policy a printed statement containing an estimate of the cash value, reserve and surplus at the end of the tontine period, based on past experience, stating that the reserve was guaranteed as to amount, but the surplus would depend on experience, and, although the insurer guaranteed the surplus, its amount could not be determined in advance, defendant was not a guarantor of the estimated surplus, so as to entitle plaintiff to recover the ámount as estimated in the illustration blank, attached to the policy, and judgment should have been entered for the actual surplus earned.
    Error to Hillsdale; Chester, J.
    Submitted November 14, 1912.
    (Docket No. 147.)
    Decided December 17, 1912.
    Assumpsit by Joseph W. O’Brien against the Equitable Life Assurance Society of the United States on a policy of insurance. The court directed a verdict for plaintiff. Defendant brings error.
    Reversed.
    Miller, Smith, Paddock & Perry, for appellant.

      Smith, Baldwin & Alexander, for appellee.
   Stone, J.

This is an action in assumpsit, brought to recover the sum of $2,210.05 and interest, claimed to be due the plaintiff as cash surplus on what is termed a free tontine policy issued to him in 1891 by the defendant. Plaintiff was solicited to take this policy by one Halsey, of Grand Rapids, whom he calls a special agent of the defendant. After some conferences with Halsey, the plaintiff, at Grand Haven, on February 28, 1891, applied for the policy in question, and paid the first premium thereon, and took a receipt therefor, signed by said Halsey as special agent. On March 17, 1891, the policy was issued in New York, and presumably sent to Halsey, because thereafter it was delivered to the plaintiff by Halsey. The policy is Exhibit I, and is hereinafter set forth. When so delivered, according to the claim and testimony of the plaintiff, there was pinned to the policy the illustration blank, or “green slip,” Exhibit II.

The policy was in words and figures following:

Exhibit I.
[Body of Policy.]
120 Broadway, New York.
Equitable Life Assurance Sooiety of the United States.
Premium, $155.50. Amount, $5,000. Age 30. No. 520,424.
William Alexander, Secretary. Thomas J. Jordan, Assistant Secretary. S. D. Ripley, Cashier. James B. Loring, Registrar. President, Henry B. Hyde. George W. Phelps, Actuary. J. G. Van Cise, Assistant Actuary. James W. Alexander, Vice President. Samuel Borrowe, Second Vice President. Edward W. Scott, Third Vice President. John A. McCall, Comptroller.
In consideration of the written and printed application for this policy, which is hereby made a part of this contract, and of the payment in advance of one hundred and fifty-five dollars and fifty cents, and of the annual payment of $155.50 to be made thereafter at the office of the Society in the city of New York on or before the 10th day of March in every year (provided that when premium for twenty full years shall have been duly paid to said Society, no further premiums will be required).
Does promise to pay to Mary E. O’Brien, if living, if not then to her husband, Joseph W. O’Brien, his executors, administrators or assigns, at the office of the Society in the city of New York, Five. Thousand Dollars, upon satisfactory proofs of the death of said Joseph W. O’Brien, of Grand Haven, in the county of Ottawa, State of Michigan.
New York, the 17th day of March, A. D. 1891.
J. B. Loring, Registrar.
H. B. Hyde, President.
New Free Tontine. No. 89. Second Edition.
Examined by.................
Notice. — No person except one of the executive officers named above is authorized to make, alter, or discharge contracts or waive forfeitures.
[On the back of policy, in red.]
List of privileges, the details of which will be found in the application.
This policy becomes incontestable two years from its date of issue. It provides for a paid-up policy after three years for as many twentieths of the original policy as Complete annual premiums have been paid. It grants freedom of residence, travel, and occupation after one year. It gives to Joseph W. O’Brien a choice of six methods of settlement upon the completion of the tontine period, on the 10th day of March, 1911 (March 10, 1911) namely:
1. The surrender of the policy for its full value consisting of the entire reserve, amounting to §2,385.00, twenty-three hundred and thirty-five dollars, together with the surplus then apportioned by the Society, either in (1) cash; (2) paid-up assurance; (3) a life-annuity, or
2. The continuance of the policy and the withdrawal of the accumulated surplus, either in (1) cash; (2) paid-up assurance; (3) an annuity.
W. Alexander, Secretary.
H. B. Hyde, President.
[On the front of the policy, in red.]
No. 520,424.
The Equitable Life Assurance Society of the United States.
120 Broadway, New York.
Free Tontine Policy.
Assurance on the Life of J. W. 'O’Brien.
No dividend will be declared on this policy until the 10th day of March, 1911.
Amount $5,000.
Term, life, 20 A. P.
First payment, §155.50.
Premium due 10th March, §155.50.
Register date of policy, 10th March, 1891.
American Bank Note Company, New York.
“William Halsey,” at the bottom, written on the bottom of the policy, and the indorsement, indorsed at the bottom, “William Halsey.”
Exhibit II.
[Front.]
For Use in 1891.
Free Tontine Illustration Blank.
For 10, 15 or 20 Payment Life Policies, with Corresponding Ton-tine Periods.
Premiums payable for ) 20
Policy $5000.00 Tontine Period ) yrs.
Age 80 Annual Premium..................... $155.50
Total premiums paid in 20 years.........._...........$3,110.00
Results at the end of the Tontine Period, on the basis explained on the other side of this sheet:
1. Cash Value, Consisting of
Reserve ...........$2,334.95
and Surplus'........... 2,210.05 $4,545.00
2. Paid-Up Value (see note on other side) $9,700.00
3. Cash Surplus ...............................$2,210.00
Under this settlement, the policy holder withdraws the surplus in cash, and retains the original policy, which is now fully paid up for $5,000, or the surplus may be used to buy an Annuity to continue with the paid-up assurance during the life time of the policy holder, about $180.00 per year.
Wi. Halsey, Agent.
Dated at Grand Rapids, 3 — 4—1891.
1ST. B. — The foregoing blank must be filled up from the Book of Tables issued during the current year by the Equitable Life Assurance Society of the United States, and based on the Society’s actual experience up to 1891.
[Back of Exhibit II.]
The Advantages of a Free Tontine Policy Shown by an Illustration Based on Actual Experience.
The fund belonging to the policy holder at theiend of the tontine period, consists of two parts: (1) The Reserve, which is a fixed quantity, may be stated in advance, and, if desired, may be written in the policy. (2) The Surplus (popularly known as “profits” or "dividends”), which is a varying quantity, depending on future experience. One of the chief recommendations of the Free Ton-tine Policy is that the Society guarantees the payment of the Entire Reserve at the end of the tontine period. The Surplus is guaranteed also, but its amount cannot be determined in advance. Calculations, however, based on the experience of the past, show approximately the surplus profits which would be payable with such a policy, if it had been issued by the Society 10, 15, or 20 years ago, and ended its tontine period today. While the results of the future must necessarily depend on the experience of the future, figures based on past experience furnish the best attainable data upon which to judge of the management of the Society, and the value of the policies now offered.
The Free Tontine Policy grants many benefits denied under all older forms. It gives absolute freedom as to travel, residence and occupation after one year, and becomes incontestable after two years.
Note. — Where the paid up value of the policy, at the end of the tontine period, exceeds the face value of the original policy, the assured has the privilege of taking a paid-up policy for the full amount of the original policy, drawing the excess on the cash basis •, or the paid-up policy may be issued to include this excess subject to a satisfactory medical certificate of good health.
J. G. Van Cise, Asst. Actuary.
120 Broadway, N. Y., Jan. 1, 1891.

Plaintiff did not know whether or not the green slip— Exhibit II — was attached to the policy when issued by the defendant. The written portion of the slip was in the handwriting of Halsey. Plaintiff testified that Exhibit II contained the figures and representations upon which he made the application for the policy; that when he received the policy, and the green slip, he read the policy all over, and that he read the front of the green slip sufficiently to verify the fact that the figures given in the green slip were the same that Halsey had previously given him. On cross-examination the plaintiff testified as follows:

“When I got this policy I presume I read all of it over, the face of it and the back of it. I presume I took the policy and the green slip together, and understood from them both that I was to be paid $2,210.05. I knew nothing of this policy that they were going to pay me the surplus until it was handed to me. I never saw these figures on the back of it, until after it was handed to me. I presume I examined the policy, and it was stated on the back of the policy that the surplus was to be, the amount apportioned by the society in 1911; but that was a condition afterwards, after the policy was paid for, and after the other contract had been entered into. I think I read the green slip while it was attached to the policy. I do not think I read the back of the green slip at that time. We had talked over what was on the front of the green slip before he had filled it in, and I knew what he was going to put in there. I read over the front of the green slip at the time, to verify what he had said to me during his conversations. I noticed at that time that there was a statement on the front of the green slip that it was an illustration blank ’; but I did not notice at that time the statement on the front that the results given were given on- the basis explained on the other side of the sheet. I presume that is stated very plainly on the front of Exhibit II. I have read over the back of the green slip. I presume I read it over about the time it matured. Because the figures had been talked over with Mr. Halsey and myself for several meetings when he solicited my insurance, and when I saw the figures verified that he willingly put in there, I took it for granted that that was all there was to it. I don’t suppose I paid very much attention to it.”

It is conceded by counsel for the defendant that the figures in the green slip were undoubtedly correctly inserted by Mr. Halsey; that they were correctly computed from the agents’ book of the Equitable, and were inserted in the green slip under exactly the conditions which they were given in the agents’ book, and were authorized to be used. The application signed by the plaintiff provided, among other things, as follows:

“VI. Tontine Profits.
“At the end of the tontine period, if the person proposed for assurance be then living, and the policy in force, the policy shall participate in the accumulated surplus derived from the policies on the free tontine plan, both existing and discontinued, as. may then be apportioned by the society.
“VII. Choice of Privileges at the End of the Tontine Period.
“The policy may then be surrendered for its full value, consisting of the entire reserve and the surplus then apportioned by the society.”

Certain free tontine tables contained in the agent’s book in use by defendant’s agents in 1891 were offered in evidence by plaintiff and received, from which the following are extracts:

“ Tables for 1891 to illustrate the advantages of tontine policies and bonds based on the results of tontine policies maturing in 1891.”
“Important. — The society issues official illustration blanks. The figures in this book are to be used in filling up these blanks. They are to be used in no other way. In no case are they to be given in letters, or on slips of paper, or on any but the society’s official blanks. Bee that in each case the appropriate figures are correctly given on the proper blank. This book is to be used only during the year 1891, in filling up blanks dated 1891.”
“Note. — The amount of profits which will be distributed among the holders of the free tontine (and semitontine), policies and bonds of the Equitable Life Assurance Society of the United States cannot be stated in advance, but calculations based on the experience of the past under tontine policies which have matured show approximately the surplus profits which would be payable with such policies and bonds if they had been issued in the past and matured today. While the results of the future must necessarily depend on the experience of the future, figures based on past experience furnish the best attainable data upon which to judge of the management of the society, and the value of its policies. These tables are prepared annually to enable agents to give illustrations based on the actual result of policies maturing during the year in which the illustrations are given. This book is to be used only during the year 1891 in filling up the society’s official blanks issued for 1891. Dated January 1, 1891.”

Counsel for the defendant concede that the agent, Halsey, was authorized to fill in the blanks in the green slip from the book in the manner which he did, but claim that lie had no authority to attach such paper to the policy. The plaintiff paid his premiums for the full period of 20 years, and then elected to take the cash surplus of $2,210.05, the amount given in the green slip. The defendant offered him $907.90, which it claimed was the surplus dividend apportioned to his policy at the completion of the tontine period, in accordance with the agreement in the policy and the application. The plaintiff refused to accept this sum, and this suit was commenced.

The trial court directed a verdict for the plaintiff for $2,210.05 and interest, and a judgment for the plaintiff was entered. The defendant has brought the case here upon writ of error, and under appropriate assignments of error it urges two grounds for reversal:

First. That the trial court erred in admitting in evidence the illustration blank or green slip (Exhibit II), as forming any part of the contract of insurance in the case, or as operating in any way to alter, modify, vary, or explain the terms of the contract between the parties as expressed in the policy and the application, which, taken together, constitute by their terms the entire contract between the parties.

Second. Assuming the illustration blank (Exhibit II) to have been properly received in evidence, and to have been properly considered a part of the contract of insurance, its construction was for the court; and the trial court’s construction of the exhibit was erroneous as a matter of law.

Upon the first ground it is urged by plaintiff that it clearly appears that Mr. Halsey was duly authorized to solicit this insurance, that it is conceded that he had authority to fill in the green slip with the figures taken from the book furnished by the defendant to its agents, that this green slip was furnished by the defendant over the signature of its assistant actuary, J. G. Van Oise, and that the application, the policy, and the green slip made up and constituted the contract of insurance. There is added force in this position from the fact that this paper is expressive of promises and agreements: For example, note the language contained on the back of Exhibit II. Is it clear that the words “this policy” restrict the contract to Exhibit I ? Upon this subject see the language of the Supreme Court of Wisconsin in Timlin v. Assurance Society, 141 Wis. 276 (124 N. W. 253). We do not find it necessary to pass upon this question; for, if we were to hold that Exhibit II constituted a part of the contract, that holding would not be decisive of the case, for the reason that it did not constitute an agreement on the part of the defendant to pay a definite or agreed amount of surplus upon this policy.

If it were conceded that Exhibit II was properly received in evidence, we are of opinion that the trial court, in determining that it constituted an agreement on the part of the defendant to pay a definite or guaranteed amount of surplus upon this policy, incorrectly construed its language. We have here set out in full both exhibits I and II, that they may the more readily be construed together. A careful consideration of these instruments leads us to the conclusion that a reasonable construction of them shows that the amount of surplus is not fixed or definite, and could not be determined until the end of the tontine period, at which time it would be apportioned by the defendant, and that, if the experience of the defendant during the said tontine period should prove to be the same as its experience had been in the preceding 20 years, the surplus would amount to the estimate given, but otherwise not, and that the future alone could decide what the amount of the surplus would be, but that there would be some surplus was guaranteed.

Speaking of Exhibits I and II in its charge to the jury, the trial court said:

“ I think these papers must be construed together, and it must be determined that under these papers, constituting the contract, the surplus was fixed at not less than $2,210.05. With that view of the testimony and the papers, I think the court would be in duty bound to direct a verdict here for that amount, plus the interest.”

We cannot agree with the trial court in this construction. That the plaintiff was bound to know the contents of Exhibit II is very clear. Cleaver v. Insurance Co., 65 Mich. 527 (32 N. W. 660, 8 Am. St. Rep. 908); Cook v. Insurance Co., 84 Mich. 12 (47 N. W. 568); Avery v. Assurance Society, 117 N. Y. 451 (23 N. W. 3). The construction of Exhibit II by the trial judge overrides the following express statements:

“The surplus (popularly known as ‘profits’or ‘dividends’), which is a varying quantity, depending on future experience. * * *
“The surplus is guaranteed also, but its amount cannot be determined in advance. Calculations, however, based on the experience of the past, show approximately the surplus profits which would be payable with such a policy, if it had been issued by the society 10, 15, or 20 years ago, and ended its tontine period today. * * * While the results of the future must necessarily depend, on the experience of the future, figures based on past experience furnish the best attainable data upon which to judge of the management of the society, and the value of policies now offered.”

We think that the clear weight of authority is against the construction of the trial judge. We have examined the following cases cited by counsel for defendant, and they support the position claimed for them: Avery v. Assurance Society, supra; Griéb v. Assurance Society (C. C.), 189 Fed. 498, affirmed in 194 Fed. 1021, 114 C. C. A. 658; Langdon v. Insurance Co., 199 N. Y. 188 (92 N. E. 440); Untermyer v. Insurance Co., 128 App. Div. (N. Y.) 615 (113 N. Y. Supp. 221). We have not the space to quote from these authorities, as we might do with, profit.

The plaintiff relies upon and cites the cases of Timlin v. Assurance Society, supra, and Equitable Society v. Meuth, 145 Ky. 160 (140 S. W. 157). In Timlin v. Assurance Society, supra, a life policy in the usual. form contained a printed provision that, on the completion of the tontine dividend period, insured might continue the policy for the original amount and apply the tontine dividend to the purchase of an annuity. Plaintiff brought action to enforce his claim, alleging that it had been stipulated in the agreement that the annuity, beginning at $53.47 and increasing annually, should be for life, and that he was entitled to its value, namely $750. It is clearly pointed out in the opinion that the option selected by the plaintiff contained a promise of a life annuity, beginning with $53.47 and increasing annually. That case can be distinguished from the instant case in several important particulars: There the paper corresponding to Exhibit II here read as follows:

The Nonforfeitable and Incontestable Semi-Tontine Policy.
Equitable Life Assurance Society of New York.
[These estimates are the authorized figure of the Society.] Policy $1,000.00. Age 34. Annual premium, $33.26. Total cost in 20 years, $665.20. Kind of policy, life in 20 payments: tontine 20 years.
If policy holder is alive and policy is in force at the end of ton-tine period, you are then entitled to either of the following options :
(1) Withdraw in cash—
Guaranteed legal reserve in policy is............ $514.31
Guaranteed surplus is estimated at.............. 591.69
Total, cash................ $1,106.00
(2) Take paid-up policy if in good health for........................................... $2,150.00
(3) Take a life annuity, increasing annually, beginning with........ 53.47
And besides have your original policy carried till death, free of cost, for......-.................$1,000.00
This pays you -.....per cent., simple interest, or 4.40 per cent., compound interest; besides you have been insured 20 years for $1,000.00 without cost.
Along the side of this smaller sheet was the following: “Tontine is a premium on living, not on dying. The best insurance ever devised for successful men. No technicalities — if we insure you, we will pay your claim.”

It will be noted that, while the word “estimates” occurs in the heading of this paper, the only item in it which is specially stated to be estimated is the “ guaranteed surplus.” That suit was not for surplus, but for the annuity mentioned. The language was:

“(3) Take a life annuity, increasing annually, beginning with $53.47.”

There was no reference to a basis upon which the estimates were calculated; no warning that the amount of surplus “ cannot be determined in advance,” or that “the results of the future must necessarily depend on the experience of the future;” no declaration in any of the papers that “no dividend will be declared on this policy” until the end of the tontine period. We do not think that case controlling here.

In the case of Equitable, etc., Society v. Meuth, supra, it appeared that the figures stated in the contract were not estimates at all, but were absolute statements of amounts, fixed and definite, as follows:

“ A choice of six methods of settlement upon the completion of the tontine period on the 23d of October, 1910, namely: (1) The surrender of the policy for its full value, consisting of the entire reserve, amounting to $456, together with the surplus then apportioned by the society, $544, either in (1) cash, $1,000; (2) paid-up assurance, $2,000; (3) a life annuity; or (II) the continuance of the policy and the withdrawal of the accumulated surplus, either in (1) cash, $544; (2) paid-up assurance, $1,000; (3) an annuity.”

The cash surplus of $544 was sued for. In the list of privileges indorsed on the back of the policy the figures “$544,” “$2,000,” “$544,” and “$1,000,” were written in pencil. Meuth testified that when he received the policy by mail it contained those figures. The defendant did not plead any attempted spoliation of the policy. It did not deny the issuance of the policy, and the court held that its answer put nothing in issue, except the effect of the contract, and the plaintiff recovered, and the judgment was affirmed. We think that the case is readily distinguished from the instant case.

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

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


author: Brooke, J.

text:
    GILLETT v. IVORY.
    1. Banks and Banking — Assignment of Deposits — Conveyance of Liabilities — Novation—Debtor and Creditor — Sale with Assumption of Indebtedness — Vendor and Purchaser — Substitution of Debtors.
    Upon learning of the sale of a private bank, a depositor could refuse to accept the purchasers as his bankers, in place of the vendors, or he could affirm the arrangement made between them and look to the purchasers to pay his deposit.
    2. Same — Estoppel.
    Having knowledge that there was a sale and that as between themselves the vendors and purchasers had arranged for a substitution of debtors, plaintiff, a depositor, by permitting his money to remain on deposit, with the new banking firm, and making no demand on the vendors, and also by filing a claim for the amount of his deposit with the receiver of the purchasers, after their failure, accepting from the receiver two dividend payments thereon, thereby became, by novation, a creditor of the insolvent purchasers, and lost hiS remedy against the vendors; plaintiff was estopped to claim that he did not assent to the substitution.
    3. Same — Election of Remedies.
    While the facts do not constitute an election of remedies, they establish a substitution of debtors with plaintiff’s consent.
    4. Same — Receivers—Jurisdiction—Attack.
    Plaintiff could not, after participating in the proceeds of the receivership, raise the objection that the court of chancery had no jurisdiction in that suit.
    5. Novation — Contracts.
    The necessary elements to establish a novation are (1) parties capable of contracting; (2) a valid prior obligation to be ¡lisplaced ; (3) the consent of all the parties to the substitution; and (4) the extinction of the old obligation and the creation of a valid new one.
    Error to Lapeer; Smith, J.
    Submitted November 8, 1912.
    (Docket No. 8.)
    Decided December 17, 1912.
    Assumpsit by Ransom Gillett against William E. Ivory and Una L. Bartenfelder, doing business as the Bank of Hadley, for certain sums deposited with defendants, evidenced by a certificate of deposit. Judgment for defendants on a directed verdict; plaintiff brings error.
    Affirmed.

      B. F. Beed and H. W. Smith, for appellant.

      W. E. Brown, for appellees.
    On May 3, 1909, plaintiff deposited with defendants, who were then conducting a private banking business under the name and style of the Bank of Hadley, the sum of $400, at which time he received the following certificate :
    “ Hadley, Mich., May 3rd, 1909.
    “No. 1,157.
    “Certificate of Deposit.
    “Not subject to check.
    “This certifies that R. H. Gillett has deposited with Bank of Hadley four hundred dollars, $400.00, payable to the order of himself in current funds on return of this certificate properly endorsed. With 4 per cent, per annum if left 12 months. No interest after maturity. No interest for fractional part of a month:
    “ Una L. Ivory, Cashier.”
    On May 11, 1909, the defendants sold out said banking business to Mark L. Hagle and Ethel Varran, who continued the business under the same name. The defend
      ant Una L. Bartenfelder (whose name was then Ivory) continued to act as cashier of the bank after the sale, the same as she had acted before the sale. As between defendants and Hagle and Yarran, it was agreed that the new owners should assume and pay the obligations of the bank as part of the purchase price. The fact of the sale of the bank by defendants to Hagle and Yarran was advertised in the local newspaper, and became known to plaintiff. In June, 1909, plaintiff entered into a contract with Hagle to erect a building to be used by the bank. Plaintiff knew at that time that Hagle was interested in the bank. He received payments on account of the building from Una L. Ivory (Bartenfelder) acting as cashier for the bank. Plaintiff demanded payment from the bank on his certificate of deposit on Friday, October 8, 1909, and again on October 9th. On October 11th the bank closed its doors, and on October 16th Hagle absconded.
    Shortly thereafter a bill of complaint was filed in the circuit court for Lapeer county, wherein one Yirgil A, Bayley was complainant and Hagle and Yarran were defendants. The bill set up the fact that the bank was insolvent; that Hagle had absconded, having previously withdrawn and concealed or disposed of large sums of money and other assets of the bank; that the bank was left without any one to manage its affairs; and that Hagle and Varran threatened to withdraw and dispose of the remaining assets. The prayer asked for the dissolution and winding up of the copartnership, for the appointment of a receiver, and for injunctive relief. A receiver was appointed under this bill of complaint, who took possession of the assets of the bank and distributed them to the creditors. In order to participate in the fund in the hands of the receiver, plaintiff signed and verified the following proof of claim:
    “State op Michigan,
    “ County op Lapeer,
    s.:
    “R. H. Gillett, being duly sworn, deposes and says that the Bank of Hadley is indebted to the deponent in the sum of $409.65. Deponent further says that he is informed and believes that said Bank of Hadley is a copartnership, and that the members of said copartnership are Mark L. Hagle and Ethel Varran, and deponent makes this affidavit for the purpose of proving his claim against said Bank of Hadley and Mark L. Hagle and Ethel Var-ran. Deponent further says that said claim consists of a certificate of deposit with said bank.
    “R. H.Gillett.
    “Subscribed and sworn to before me this 10th day of December, A. D. 1909.
    “ Frank T. Hadley,
    “Notary Public, Lapeer County, Michigan.
    “ My Com. expires Augustl8th, 1911. ”
    The receiver made and plaintiff accepted two dividend payments which were indorsed upon his certificate of deposit as follows:
    “January 3rd, 1910, paid on the within $102.41. January 13th, 1911, paid on the within $40.06.
    “Grant Stimson, Receiver.”
    At the time of the trial the receiver had not been discharged, but was still administering the estate.
    Touching plaintiff’s knowledge of the situation at or near the time of the sale, he testified:
    “ I could not tell you how long it was after this deposit was made that I learned they had sold out, a month after-wards anyway. I learned they had sold out from Will Ivory. It was in front of Guiles’ blacksmith shop. I had a talk with him there. I told him I heard he had sold out, and I stated to him that I had some money in the bank at that time.

      ”Q. Did he then tell you if you didn’t want to leave the money there you could go and get it ?
    “A. No, sir.'

      “Q. What did he say ?
    “ A. I told him, I says, ‘Is it sold out,’ and he said it was. I says, ‘If that is the case, I am going up and get my money. I don’t like it a bit; ’ and he says5 ‘I wouldn’t do it because it is all right. I got lots more money in there than you have;’ and he says, ‘I ain’t scared a bit.’ That was about all the conversation I had with him at that time. I knew that he had sold out, and that I could go and get my money if I wanted to. I didn’t go and get it. I did not have a talk with his sister after that. I had no talk with her about it whatever. I did not tell his sister I was going to leave the money there. * * *
    " Q. Why did you contract with Lee Hagle, instead of William Ivory and Una Ivory ?

      “A. Because Lee Hagle was the man who came to me to do the work, and I done it. That was after the Ivorys were out of business. I knew they were out of business before I commenced the bank building. I constructed that building knowing that I had money in the Bank of Hadley, and I knew at that time that Hagle was interested in the Bank of Hadley. I received my pay from Una L. Ivory. I put my signature to a paper when I received my pay. It was a receipt for the money. The sale of the bank was before I made the contract to build the building. I had no talk with Mr. Hagel or Miss Ivory with reference to my leaving the money if I got the contract.
    “Q. How much did you expect to make clear?
    “A. I expected to make a couple of hundred.”
    Plaintiff in this suit seeks to recover from defendants the sum of $288.01, being the balance unpaid upon his certificate of deposit. At the conclusion of the proofs, both plaintiff and defendants moved the court for a directed verdict. Defendants’ motion was granted, and plaintiff’s denied. Error is assigned upon both rulings.
   Brooke, J.

(after stating the facts). The court in directing a verdict in favor of defendants held, as a matter of law, that plaintiff had elected his remedy in proceeding against Hagle and Yarran, instead of against defendants. To define plaintiff’s acts as an election of remedies may not be strictly accurate. When plaintiff first learned of the sale of the bank to Hagle and Yarran, he had two courses open to him. It is immaterial whether these courses be denominated as remedies or not. He could refuse to accept Hagle and Yarran as his debtors in the place of defendants, or he could affirm the arrange-merit which he knew had been made between defendants and Hagle and Varran, and look to them to pay his deposit, instead of to defendants. It is clear that he knew at that time that Hagle and Varran had undertaken to pay the depositors in the bank, for he testifies:

“I knew that he [defendant Ivory] had sold out, and that I could go and get my money if I wanted to. I didn’t go and get it.”

Of course, he could not get his money from Hagle and Varran (with whom prior to that time he had had no contract relations) upon any other theory than that they had, as between themselves and defendants, agreed to assume and pay the indebtedness of the old partnership. The fact, therefore (emphasized by plaintiff), that he was never told that Hagle and Varran had assumed the old indebtedness, becomes unimportant. Having knowledge of the sale and of the fact that as between themselves there had been a substitution of debtors, it would seem clear that plaintiff elected to accept Hagle and Varran as his debtors in the place and stead of the defendants, who were then bounden to him. This election is evidenced by the fact that he permitted his deposit to remain in the hands of Hagle and Varran for some months after he had knowledge of the sale, by the fact that he knew he could get his money from them if he wanted to, and by the further fact that during those months he made no demand upon defendants for his money, though he knew that they had sold the bank and had retired from the business.

This, however, is not all. After the bank had failed and Hagle had absconded, and a receiver had been appointed, he filed his claim with the receiver. This claim is verified by his oath, and recites that Hagle and Varran are indebted to him in the amount of the certificate of deposit. Obviously this debt was not due to plaintiff from both Hagle and Varran and defendants. If defendants were his debtors at that time, plaintiff had no right to participate in a fund to which the creditors of Hagle and Varran alone were entitled. Three months after the receiver was appointed he accepted from him a dividend and another a year later.

These facts, concerning which there is no dispute, indicate in our opinion a novation rather than a technical election of remedy. Counsel for defendants seem to concede that, if his clients are entitled to a verdict upon the ground of novation, that question was one of fact upon this record, and should have been submitted to the jury. While it may be urged that plaintiff’s conversation as detailed by him with defendant Ivory at the time of the sale and his subsequent conduct up to the time of the failure do not conclusively establish a novation, they very persuasively lead to that conclusion, and plaintiff’s conduct after the failure can be accounted for upon no other theory than that he had accepted a substitution of debtors at the time he learned of the sale. This conduct, we think, conclusively establishes tho fact that he had accepted such substitution. It is urged by plaintiff that the court of chancery was without jurisdiction in the receivership matter, and therefore plaintiff is not bound by his acts in connection therewith. We need not determine whether the equitable proceeding is defective or not. Plaintiff is in no position to raise the question. He recognized the propriety of the proceeding and participated in the benefits arising therefrom. We give consideration to his acts in relation to the receivership only for the purpose of determining how far they give character to his prior acts and conduct as bearing upon the question of novation.

The necessary legal elements to establish a novation are (1) parties capable of contracting; (2) a valid prior obligation to be displaced; (3) the consent of all the parties to the substitution; and (4), lastly, the extinction of the old obligation and the creation of a valid new one. The first and second of these elements are conceded to exist. As to the third, it appears conclusively that the defendants and Hagle and Varran agreed to the substitution, and we think it is demonstrated that plaintiff likewise so agreed. If he did so, the fourth element follows as a matter of law. Ample consideration for the novation is found in the transfer of the fund to Hagle and Varran, their undertaking to pay plaintiff, and his assent thereto. Plaintiff cites and relies upon the recent case of Harrington-Wiard Co. v. Manufacturing Co., 166 Mich. 276 (131 N. W. 559). We have carefully examined that case, and can find nothing therein inconsistent with our conclusions herein. The only equivocal act (tending to prove novation) in that case was the sending of a statement of account to the Lion Motor Car Company, and under the testimony that fact was held to be insufficient to carry the case to the jury. In the course of his opinion Mr. Justice Stone, says:

“ To constitute novation the creditor must have consented to the discharge of the original debtor, and must have accepted the promise of the new debtor.
“ It is true that it has been held that it is not essential that the assent to, and the acceptance of, the terms of novation be shown by express words to that effect, but that the same may be implied from the facts and circumstances attending the transaction, and the conduct of the parties thereafter.”

Plaintiff’s conduct after he learned of the sale and after the insolvency of the bank should be held to estop him from now claiming that he did not assent to the novation.

Relying upon such assent, defendants took no steps to protect themselves under their contract with Hagle and Varran. Indeed, while plaintiff was asserting that Hagle and Varran were his debtors, they were unable to do so. Now that he finds that Hagle and Varran are financially unable to pay his claim in full it is too late for him to change his position, and compel defendants to respond at a time when they cannot protect themselves.

Judgment is affirmed.

Moore, C. J., and Steers, McAlvay, Kuhn, Stone, Ostrander, and Bird, JJ., concurred.


text:
    CARSON v. CARSON.
    Divorce — Nonsupfort—Excusable Failure to Provide for Family.
    It was not sufficient evidence of a wanton and cruel neglect and refusal to support complainant, that her husband, after losing his position as local manager of a telephone exchange, about five years before the hearing, went to Washington where he failed for some time to obtain employment, but later secured work at $75 a month; that he sent occasional presents to his wife and daughter, who kept a boarding house to support themselves; that he asked them to come to him, but she wrote she would not go until he had something to which she could go, and that he had never been able to send her sufficient money to pay their expenses but intended ultimately to have them join him; that he had always been kind and had provided for the family as well as his means would permit, and would probably continue to do so if she returned to him.
    Appeal from Muskegon; Sullivan, J.
    Submitted November 18, 1912.
    (Docket No. 85.)
    Decided December 17, 1912.
    Bill by Mabel C. Carson against Byron L. Carson for divorce. From a decree for complainant, defendant appeals.
    Reversed.

      Cross, Vanderwerp, Foote & Boss, for complainant.

      William Carpenter, for defendant.
   Brooke, J.

This is a divorce case. By her bill complainant charged that defendant—

“Has continuously, since July, 1907, neglected and refused to support and maintain your oratriz and her said child; he, the said defendant, being a well and able-bodied man, sufficiently able to furnish and provide support for your oratriz and their said daughter.”

Upon the hearing complainant was permitted to amend by inserting the words “wantonly and cruelly” before the words “neglected and refused.” From a decree in favor of complainant, defendant appeals.

It appears that the parties were married in 1896; defendant at that time being the manager of the local telephone exchange in Muskegon, at a salary of $65 per month. After about two years the parties moved to Saginaw, and then to Bay City; defendant still being engaged in the telephone business, and receiving a salary of $90 per month. This continued until early in 1907. In January of that year complainant, with her daughter, then seven years old, returned to her home in Muskegon to take care of her mother, who was then ailing, and who died shortly thereafter. In the spring of 1907, defendant resigned his position in Bay City, because his salary was reduced from $90 to $75 per month. Believing he could do better in the west, he went to Washington in July of that year. The panic of 1907 is said to have been responsible for the fact that he was unable to get any employment for some time. In the meantime complainant kept boarders in her father’s home in Muskegon, thus supporting herself and child. The father died in 1908, and she and her brother inherited the property, valued at from $5,000 to $6,000.

During the five years, 1907-1911, while complainant was thus supporting herself and child, defendant contributed practically nothing to the support of the child, and nothing to the support of complainant. An operation upon the child’s throat becoming necessary, complainant wrote defendant for money, and he sent $100 for that purpose. He claims to have sent $150. The expense of the operation was $160, the balance of which was borne by complainant.

On May 22, 1911, complainant, being tired and worn out, wrote defendant that she intended to give up her boarders and go west to him. In this letter she asks him to tell her exactly how he is situated. Defendant’s answer to this letter* shows that at that time he had a position at #75 per month, but hoped soon to do better. His net capital at the time he wrote was but #77.50. While he expressed an earnest desire to have complainant and their child join him, his letter was, upon the whole, very discouraging, and indicated plainly that at that time he was unable to support complainant and her daughter. Complainant does not appear to have answered this letter, but three months later (August, 1911) filed her bill of complaint.

The earnings of the husband during the first 10 years of his married life seem to have been insufficient for the support of his family. The record does not show any particular extravagance upon the part of either of the parties, yet they were always in debt. They never seemed to be quite able to make ends meet. This condition of their finances is claimed by complainant (and doubtless truthfully) to have caused her much worry and anxiety. During his absence in the west, she repeatedly wrote to him that she would not go to him until he had something to which to go. That time seems never to have come; for never has defendant been able to send to her money sufficient to take her and the child to him. There seems to us no doubt, however, that defendant, during all these five years, has been earnestly, though, perhaps, inefficiently, striving to gain a foothold —to better his condition and ultimately to bring his wife and child back to him. His letters, we believe, indicate an honest, genuine affection for his family. While he deplores his past failures, he is always optimistic and hopeful for the future. Complainant herself credits his good intentions. She testified:

“Q. Well, now, then, I will say that you haven’t any doubt that if you should go out there to live with him that he would support you to the extent that his earnings would enable him to do ?
“A. No; I think he would do that, I suppose.”

Defendant was always kind to his family. Complainant says:

“ He was one of the quiet sort. He was never ugly.”

At the time of the hearing defendant was local manager of a telephone and telegraph office at Centralia, Wash., at a salary of $85 per month, with (he says) good prospects of early advancement. He then expressed himself as anxious and willing to support his wife and child, if they would go to him.

Can defendant’s failure to support complainant for five years, which is admitted, be construed, under the circumstances of this case, to have been wanton and cruel, within the meaning of the statute? We are constrained to hold that it cannot be so construed. Stewart v. Stewart, 155 Mich. 421 (119 N. W. 444). Neither misfortune nor incompetence resulting in a failure to support affords the wife any ground for relief under the law. The possibility of such a result was one of the hazards complainant undertook when she assumed the burdens incident to the contract.

The decree must be reversed and the bill dismissed, but without costs.

Moore, Q. J-, and Steere, McAdvay, Kuhn, Stone, Ostrander, and Bird, JJ., concurred.


author: Moore, C. J.

text:
    FELSKE v. DETROIT UNITED RAILWAY.
    Street Railways — Negligent Operation of Oar — Highways and Streets — Derailment.
    Where the rear trucks of defendant’s street car, running on a temporary track, became derailed, and the car swung out into the street injuring plaintiff, upon testimony having a tendency to show that the car ran about a block on the pavement, that its motion and jar was unusual or excessive, that the motorman is usually able to tell from the operation and sound or speed of his car if the rear trucks are off the tracks, a verdict ought not to have been directed for defendant; the question of negligence was one of fact for the jury.
    Error to Wayne; Van Zile, J.
    Submitted November 21, 1912.
    (Docket No. 167.)
    Decided December 17, 1912.
    Case by Albert Felske against the Detroit United Railway and another for personal injuries. Judgment for defendants upon a directed verdict. Plaintiff brings error.
    Reversed.

      Sloman & Slomcm, for appellant.

      Brennan, Donnelly & Van De Mark (A. B. Hall, of counsel), for appellees.
   Moore, C. J.

This case has been here before, and was sent back for a new trial. The decision is in 166 Mich. 367 (130 N. W. 676). On the second trial in the circuit court, the circuit judge, after hearing the testimony of witnesses of both parties, directed a verdict in favor of the defendants. The case is brought here by writ of error.

A reference to the opinion when the case was here before will make an extended statement of facts unnecessary. In disposing of the cas¿, Justice Blair, in speaking for the court, said in part:

“The testimony of plaintiff’s witness Watson, which is the only testimony on the subject, does not support, but tends to negative, an inference that the running of the car was so unusual that it ought to have attracted the attention of the car men. A verdict based upon this theory would not be supported by any legitimate inference from the facts and circumstances disclosed by the testimony, but would be the result of mere conjecture.”

Upon the first trial it seemed to be the theory of the plaintiff that negligence might be inferred from the fact that an accident happened. Upon the second trial a number of witnesseá were sworn who were not sworn on the first trial. One of the witnesses testified in substance:

“ That for a distance, he believes, of about 80 rods immediately preceding the place of the accident, ‘ it was a rough ride over the pavement;’ that he knew the hind trucks were on the wood pavement by the jar of the car inside; that it was different from the movement of the car while it was on the rails before that. There was a marked difference; that the whole car shook; that it was something anybody would have noticed, different from the ordinary running of the car; that it would be like riding on a wagon box over rough roads.”

Another witness testified:

“ That for a block before the car struck the wagon, she noticed the shaking of the car on the bottom and sides and the rattling of the lamps and windows; that it was rough riding, as if they were going over small stones, or something like that; that before that the ride had been smooth. It shook the lamps and windows so that she took particular notice of it.”

A third witness testified:

“That for about a block before the car finally swung around it shook it enough to lift him up; that it was like riding on gravel stones; that it affected his reading of a newspaper, which he had been able to read before; that it made the people in the car at the time look wild — as if an accident was about to happen.”

Plaintiff also produced a witness who had been a motorman in the employ of the Detroit United Railway. He testified in substance:

“The rules of this defendant company required that if anything went wrong, it was the business of the motorman at once to investigate and see what the matter was; that in investigating the first thing he would do ‘ would be to stop the car and get off, shut off the power, put on the brakes; ’ that if he felt anything unusual in the jar of his car, it would be necessary to throw on the emergency brakes and reverse the machinery, and his duty to stop the car as soon as possible; and, further, that if he knew his car was off the track, it would be his duty to shut off his power quickly; that a motorman could tell by the sound and feel of the car whether his car was off the track; that he should have no trouble in finding out when the car is off the track; that the construction of these cars is such that in operating the car the electric current first acts upon the motor in the forward truck; and only after the controller reaches a certain point does the current operate on the motor in the rear truck; that a motorman in operating a car of this type should know whether he is getting additional power from his rear trucks; that, if the wheels of the rear truck were off the track, the motor in the rear truck would not work; and, also, that a motorman could tell by the speed of his car whether or not he was getting power from his rear truck; that it would not be good railroading to keep on the power if there was any indication at all that the car was off the track.”

This testimony made a very different case from the one presented here before, and required the case to be submitted to the jury under proper instructions. See Swanson v. Power Co., 113 Mich. 603 (71 N. W. 1098); Higgins v. Cement Co., 152 Mich. 390 (116 N. W. 397); Johnson v. Chemical Co., 156 Mich. 669 (121 N. W. 269); Sheffer v. Fleischer, 158 Mich. 270 (122 N. W. 543); Schmidt v. Mining Co., 159 Mich. 308 (123 N. W. 1122); Goda v. Maurer, 162 Mich. 621 (127 N. W. 799).

Judgment is reversed, and a new trial ordered.

Steere, MoAlvay, Brooke, Kuhn, Stone, Ostrander, and Bird, JJ., concurred.


text:
    HARPER v. MICHIGAN MUTUAL TORNADO, CYCLONE & WINDSTORM INSURANCE CO.
    Insurance — Mutual Assurance Companies — Cyclone Policy— Assignment of Rights — Destruction of Subject Matter of Contract.
    Where plaintiff purchased property that was insured by a policy in a mutual tornado and cyclone insurance corporation, and the insurer’s charter and by-laws provided that the insurance of any member should cease upon the sale of the insured property, and that the company should not insure old or dilapidated structures or buildings not on a secure foundation, provision being made also for assignment of policies with the approval of the secretary of the insurer, plaintiff could not recover for a loss occurring after the transfer of title and before he had secured the approval of the secretary to an assignment: he did not become a member of defendant corporation by the assignment of the policy; nor did the approval of the secretary indorsed on the policy after notice of the loss effect a transfer of the insurable interest, since the secretary had no authority after destruction of the insured property to consent to the assignment.
    Error to Shiawassee; Miner, J.
    Submitted November 21, 1912.
    (Docket No. 163.)
    Decided December 17, 1912.
    Assumpsit by Guy Harper against the Michigan Tornado, Cyclone & Windstorm Insurance Company on a policy of insurance. Judgment for plaintiff. Defendant brings error.
    Reversed; new trial denied.
    ' A. L. Chandler, George E. Pardee, and Thomas Sullivan, for appellant.

      Seth Q. Pulver, for appellee.
    On January 17, 1908, defendant issued one of its policies to Charles and Isabell Brown, who on that day, according to the terms of the policy, became members of the defendant organization. The policy was in the sum of $1,500, and covered a store building in the city of Owosso. On October 27, 1911, the Browns sold the insured property to plaintiff. The policy, which was introduced in evidence upon the trial, shows that it was assigned and transferred to plaintiff on November 8, 1911. Underneath said assignment indorsed upon the back of the policy appears the following:
    “The above transfer is hereby approved. Hastings, Mich. November 18, 1911. D. W. Rogers, Secretary.”
    The insured building was destroyed by a cyclone on November 11, 1911, just one week prior to the date upon which the secretary indorsed his approval of the assignment. It was the claim of plaintiff that on November 14, 1911, three days after the property was destroyed, he wrote a letter to defendant in which he advised defendant that he had bought the property, that it had been destroyed or damaged, and inquiring whether he “ should hold the policy until they came or further instructions as to what to do with it.” The receipt of any such letter is denied by defendant. On November 15, 1911, defendant’s secretary wrote plaintiff as follows:
    “ Hastings, Michigan.
    “ Nov. 15th, 1911.

      “Dear Sir:

    “ Mail me the policy in accordance with Sec. 14 of the charter.
    “ Respectfully yours,
    “ D. W. Rogers,
    “ Secretary.”
    To this letter plaintiff replied:
    “Laingsburg, Michigan,
    11-16-11
    “ Mr. D. W. Rogers,
    “Mutual Insurance Company,
    “ Hastings, Michigan.
    “Dear Sir:

    “Your card received, but not until after I had written again. Inclosed is the policy with one dollar covering fee. Awaiting your consideration I am,
    “ Yours very truly.”

      This letter with the policy was mailed on the 16th or 17th, and was acted upon by defendant’s secretary on the 18th, and the policy was returned to plaintiff. Plaintiff thereafter made a demand upon defendant for settlement of his loss under the policy. This being denied, he brought suit.
    The charter and by-laws of the defendant company are a part of and are printed in each policy. Pertinent provisions of the charter follow:
    “ Sec. 14. Any member of this company may, upon application to the secretary, and paying a fee of one dollar, sell or sign his policy of insurance, such assignment to be approved by the secretary on the policy so assigned.
    “ Sec. 15. The insurance of any member shall cease upon the sale of his, her or their property insured, but, he, she or they shall be holden for all assessments, until his, her or their policy shall be legally withdrawn and canceled, and the membership terminated.”
    One section of the by-laws only is important in this controversy :
    “Sec. 3. This company shall not insure against the destruction or damage to hay or grain in stacks, windmills, old dilapidated buildings, buildings not on solid and secure foundations, nor buildings not enclosed, but shall not be construed to exclude porches on dwelling houses.”
    At the close of the proofs, defendant moved for a directed verdict. This motion was denied, and the court charged the jury in part as follows:
    “ If the secretary at the time he made the transfer on the 18th day of November, and at the time that he wrote this postal card (Exhibit E) November 15th, 1911, ‘Mail me the policy in accordance with section 14 of the charter,’ if at that time he understood all the facts in connection with the transfer of the property to plaintiff, if at that time he knew that there had been a tornado which had destroyed the property, and if at that time he mailed thia postal card asking for the return of the policy, and upon the return of the policy received one dollar and kept that one dollar for the use and benefit of the company, and signed it on the 18th day of November, 1911, and then returned the policy to the plaintiff, then and in such case he would have waived any forfeiture which may have previously happened on account of his not having indorsed that policy previous to the windstorm. # * #
    “ Now, the question for you to determine, the principal question in this case, is, did the plaintiff in this case give the defendant’s secretary full knowledge of all the facts previous to the 18th day of November, the time when he signed this policy? Did the secretary have that full knowledge of all the facts ? If he did, then the plaintiff is entitled to recover in this case. If he did not, the plaintiff is not entitled to recover.”
    The jury returned a verdict in favor of plaintiff for the full amount of the policy. A motion for a new trial was made by defendant, one of the reasons for which was that the verdict was against the weight of evidence.
   Brooke, J.

{after stating the facts). While the evidence that plaintiff gave notice to defendant of the de-, struction of the building before defendant’s approval of the assignment was indorsed upon the policy is not to us convincing, we find it unnecessary to determine that the verdict based upon that finding is against the weight of the evidence. We will assume that on November 18th, when the secretary indorsed his approval of the assignment, he knew that the building had been destroyed, and that he intended by his act to receive the policy so as to make it cover a loss that had already occurred. It is clear that under section 15 of the charter the insurance under this policy ceased upon October 27, 1911, the day of the sale from the Browns to plaintiff. Section 14 provides how the insurance may be assigned. The approval of the secretary is made a prerequisite. Assuming that plaintiff secured the signature of the Browns to the assignment on November 8th, that act did not make him a member of defendant company. So that on the 11th, when the loss occurred, plaintiff was an utter stranger to defendant. No contractual relations whatever existed between the parties at that time. On the 18th, when, by virtue of the approval of the assignment, plaintiff for the first time became a member of the defendant organization, liable for its assessments and entitled to its benefits, he had no building to insure. Baldly stated, plaintiff’s proposition is this: That, after his building was destroyed, he could effect an insurance upon it through the wrongful act of the secretary. This is not a case of waiver, and is not governed by the rules laid down in the many cases cited by plaintiff. It is a case where, if plaintiff’s contention could prevail, defendant’s secretary would be permitted to take $1,500 from the members of this defendant organization and present it to plaintiff. This is not insurance. It is vicarious philanthropy.

Section 3 of the by-laws forbids the defendant from insuring buildings not on a solid and secure foundation. At the time the insurance was effected (in plaintiff’s interest), the building was in ruins as shown by the exhibits. But it is unnecessary to have recourse to the policy. Public policy forbids the holding that the agent or officer of an insurance company possesses any such power. As well might it be claimed that, after a building had been destroyed by fire, the owner thereof could, after acquainting the agent with the fact, secure a policy which would cover his loss, upon the theory that the insurance company had waived the existence of the building because the agent knew it was already burned. While the citation of authorities upon so obvious a question is unnecessary, we refer to a recent exhaustive decision of this court, Kamm & Schellinger Brewing Co. v. Insurance Co., 168 Mich. 606 (134 N. W. 999), where Mr. Justice Stone defines the reciprocal rights and duties of members of mutual insurance companies and reviews the authorities.

Judgment is reversed, and there will be no new trial.

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


author: Bird, J.

text:
    STARKS v. PRESQUE ISLE CIRCUIT JUDGE.
    Intoxicating Liquors — License—Distance from Church — Religious Purposes.
    Under Act No. 291, Pub. Acts 1909, 2How. Stat. (2dEd.) §5091, forbidding the establishment of a bar within 400 feet along the street line from the front entrance of a church, a store or building formerly occupied as a flour and feed store, leased but not actually occupied by a religious organization, and not r^ady for occupancy at the time a license was granted to a liquor dealer, was not a church within the meaning of the act.

    Mandamus by Arthur E. Starks to compel Frank Emerick, circuit judge of Presque Me county, to issue a preliminary injunction in a suit instituted by relator to restrain one Carl Theis, defendant therein, from opening a saloon in the city of Onaway.
    Submitted November 32, 1912.
    (Calendar No. 25,264.)
    Writ denied December 17, 1912.

      Fred P. Smith, for relator.

      Victor D. Sprague, for respondent.

       On the question what is a church, within a statute forbidding traffic in intoxicating liquors within given distance of such a building, sea note in 22 L. R. A. (N. S.) 194.

   Bird, J.

The relator seeks a writ of mandamus from this court to compel the respondent circuit judge to issue an injunction to restrain Carl Theis from conducting a saloon in the city of Onaway, for the reason that it is located within 400 feet from a church.

On the 3d day of June, 1912, the city council approved the application of Carl Theis, and granted him a license to conduct a saloon in the Waldorf Hotel block. On the 11th day of June his bond was approved by the council. Following this action of the council, the prosecuting attorney, on the relation of Arthur E. Starks, filed a bill in equity to restrain the county treasurer from issuing the receipt and card and to restrain Theis from operating his saloon, and made both of them parties defendant. After the defendants’ answers were filed, the circuit judge issued an order, directed to the defendants, to show cause why an injunction should not issue agreeable to the prayer of the bill. A hearing thereon resulted in a denial of the writ.

It appears from the record that on the 5th day of June, 1912, a religious order, incorporated as the Reorganized Church of Jesus Christ of the Latter Day Saints, moved into its new quarters, which are within 400 feet from the proposed saloon. This organization had been holding services in the city about 2£ years prior to this date, and had occupied Wilson’s Hall in which to conduct its services. In October, 1911, it decided, by resolution, to lease a portion of a building in the business district, which had only a short time before been occupied as a flour and feed store. The lease was to begin at the rate of $8 per month upon the expiration of its lease of the Wilson Hall, which would occur on June 5,1912. On the 3d day of June, the date upon which the license was granted, its room had been partitioned off from a larger room, but was not yet ready for occupancy, and was not actually occupied by the organization for church purposes until the 5th day of June.

One of the questions, and we think the important one, discussed in the briefs of counsel is whether the license granted to Theis would be affected by the subsequent occupancy of the new quarters for church purposes.

The statute (Act No. 291, § 37, Pub. Acts 1909, 2 How. Stat. [2d Ed.] § 5091) which gave rise to this controversy provides in part that:

“ No license shall be issued to any one to open up and establish a new bar or saloon having its front entrance within four hundred feet along the street line from the front entrance of a church or public schoolhouse or in any residence district, unless,” etc.

This statute has reference to churches and schoolhouses that are within the prohibited distance from the proposed saloon when the license is granted, and not to those that are established and located within the prohibited distance after the license is granted. The law makes it obligatory upon one who intends to open a saloon to present his application in writing and under oath to the council, showing therein the location of the proposed saloon, and also showing that he is not disqualified, under the statute, to engage in the business. Section 4, Act No. 291. The same section authorizes and empowers the council to pass upon the qualifications of the applicants and to grant licenses. When these steps are taken and the license is granted, and the approval of the council is indorsed upon the application, the license is issued, within the meaning of this statute; and.it would not seem to be a reasonable construction of the law to permit the license to be defeated by the subsequent act of establishing a church within the prohibited distance. In re Cheney, 35 Misc. Rep. 598, 72 N. Y. Supp. 134; People v. Lammerts, 18 Misc. Rep. 343, 40 N. Y. Supp. 1107.

The applicant about to engage in the business at a certain location might or might not have knowledge of the intended use for church purposes of some building within prohibited zone; whereas, if it were being actually used for such purpose, he would have a way of informing himself. It is the actual occupancy, rather than the contemplated occupancy that should determine the question. In re Rupp, 54 Misc. Rep. 1, 105 N. Y. Supp. 467.

A further question raised by the relator is that the proposed saloon is within 400 feet from the Wilson Hall, where it had been holding church 'services for upwards of two years. The measurement is made by taking the distance from the front entrance of the Wilson Hall to the front entrance of the Waldorf Hotel. The record shows that the proposed saloon has a front entrance into the street, but that such entrance is more than 400 feet from the Wilson Hall. It is further shown that on the 2d day of June, when the license was granted, there- was a door leading from the hotel office into the saloon. It is argued that, because many will likely enter the saloon from the hotel office, the measurement should be taken from the front entrance of the hotel. We cannot agree to this reasoning. The statute prescribes that the measurement shall be made from the front entrance of the saloon. The fact that one may enter the saloon from the hotel office will not thereby convert the hotel office into a saloon. Where the front entrance is, is determined by the physical construction and arrangement of the room and its relation to the street, rather than by the entrance which is most used.

We are of the opinion that the trial court reached the right conclusion, and the writ of mandamus prayed for will be denied, with costs of this court to the respondent.

Brooke, J., concurred with Bird, J.

Stone, J. I concur in the result, on the ground that the room in question is not a church, within the meaning of the statute.

Moore, C. J., and Steers, McAlvay, Brooke, Kuhn, and Ostrander, JJ., concurred with Stone, J.


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      In re MILLER’S ESTATE.
    1. Insane Persons — Guardian—Petition—Probate Court.
    A petition for the appointment of a guardian for an incompetent is valid and sufficient to confer jurisdiction, notwithstanding that it does not contain a statement of the cause of incompetency. 8 Comp. Laws, § 8709, 4 How. Stat. (2d Ed.) § 11565.

      3. Practice — 'Time—Incompetent Persons — Probate Courts — Estates of Persons under Guardianship.
    The period of 14 days named by statute for the service on the incompetent of citation “before the time” appointed for the hearing, is to be determined by including the day of hearing and excluding the day of service.
    3. Same — Probate Court Rules — Time of Service.
    But under Probate Court Rule 5, 14 full days’ notice before the day of hearing is required as to the next of kin.
    4. Same — Collateral Attack — Judgments.
    The objection cannot be raised in a collateral proceeding, after appointment of a guardian.
    5. Insane Persons —Guardian’s Sale — Fiduciary Relations — Good Faith — Superintendents of Poor.
    A superintendent of the poor, whose approval of a sale of the ward’s realty is required by 3 Comp. Laws, § 3118, 4 How. Stat. (3d Ed.) § 11271, cannot become a purchaser of the ward’s property at private sale ordered by the court, since he acts in a fiduciary capacity in relation to the incompetent.
    Certiorari to Grand Traverse; Mayne, J.
    Submitted November 23,1911.
    (Docket No. 174.)
    Decided December 17, 1912.
    Upon the petition of Thomas W. Robinson, guardian of the estate of Adeline Miller, an incompetent, for leave to sell real estate to pay debts of the incompetent, the probate court of Leelanau county issued license' to sell at private sale. From an order of said court confirming the sale made pursuant to the order or license, Charles Miller and others appealed to the circuit court, in which the order was affirmed. Appellants brings certiorari.
    Affirmed in part: Reversed in part.

      Clinton L. Dayton, for appellants.

      J. W. Patchin, for appellee.
   Bird, J.

Such proceedings were had in the probate court for the county of Leelanau as resulted in the appointment of a guardian for the person and estate of Adeline Miller, an incompetent, and a sale of certain of her real estate for the purpose of paying her debts and furnishing her support and care. Objections were filed by the presumptive heirs and the order of confirmation opposed by them on several grounds. The objections were overruled by the probate court and the sale confirmed. An appeal to the circuit court was taken, where the objections were again overruled and the appeal dismissed. The proceedings were then removed to this court by certiorari.

The jurisdiction of the probate court is attacked because of the insufficiency of the petition for the appointment of the guardian on the ground that it does not allege the cause of the mental incompetency. The statute applies to “ any insane person or any person who, by extreme old age or other cause, is mentally incompetent to have charge and management of his property,” etc. Inasmuch as the statute applies to all cases of mental incompetency, regardless of how they were induced, it would not seem to be important that the cause should be stated. The important allegation is that the person is “mentally incompetent to have charge and management of his property,” and that allegation is duly made in the petition. A petition in substantially the same language as the present one was sustained in Be Bassett, 68 Mich. 348 (36 N. W. 97).

A lack of jurisdiction in the probate court is also alleged because the citation was not served within the time provided by law. The service was made on the alleged incompetent on September 4th, and the day fixed therein for the hearing was September 18th. The statute provides that the citation shall be served on the alleged incompetent “ not less than fourteen days before the time so appointed.” 3 Comp. Laws, § 8709 (4 How. Stat. [2d Ed.] § 11565). It is contended that, under the rule laid down by the court for the computation of time in such cases, this statute requires 14 full days before the day of hearing. We think counsel is in error in this contention. Had the statute provided that the citation should be served 14 days before the day of hearing instead of 14 days before the time of hearing, it would have required a service of 14 full days. Under this statute the day of hearing is included and the day of service excluded. We think the service was made in season to comply with the rule laid down in Chaddock v. Barry, 93 Mich. 542 (53 N. W. 785). Service of the citation on the next of kin was not made until the 6th day of September, and this is also said to be a fatal defect. A reference to the statute will disclose that it is silent as to notice on the next of kin, but this court has held that they must have notice (In re Myers, 73 Mich. 401 [41 N. W. 334]), and the rules of probate court require that they shall be served with notice of the proceeding “at least fourteen days before the day set for hearing.” Rule 5. It will be noted that the language of the rule differs from the language of the statute and requires a service of 14 full days before the day of hearing. The service of notice upon the next of kin was defective, and, had the objection been raised in that proceeding, it would have been the duty of the probate court to set it aside; but we think it is not a valid objection in a collateral proceeding like the present one.

The confirmation of the sale was opposed, among other reasons, because one parcel was sold to William Nelson, one of the superintendents of the poor, whose approval was necessary before a license of sale could be issued. The statute affecting this question provides that:

“No license shall be granted to any guardian to sell real estate of his ward as provided in this chapter, in any case excepting that of minors, unless the superintendents of the poor of the county of which the ward is an inhabitant, or in which he resides, shall certify to the judge of probate, in writing, their approbation of such proposed sale, and that they deem it necessary.” (3 Comp. Laws, § 9118, 4 How. Stat. [2d Ed.] § 11271.)

The evident intent of the legislature in passing this statute was to throw around such sales an added protection against bad faith and fraud. It made the superintendents of the poor in effect special guardians to pass upon the necessity and propriety of making a sale of the ward’s lands, and with reference to such act it places them in a fiduciary relation to the ward, and demands of them an exercise of their best judgment, unaffected by selfish motives. If Mr. Nelson coveted the parcel which he bought, he was in no position to act for the best interest of his ward. Such a sale to her guardian would have been admittedly an illegal sale, and the same reasons which would make it an illegal sale to him will operate to make the sale illegal as to Mr. Nelson.

It is urged that the sale was made to Mr. Nelson in good faith. That fact will not rescue it from illegality; neither will the fact that an adequate price was paid. 21 Cyc. p. 135. It is the policy of the law to keep the individual interest of one acting in a fiduciary capacity from coming into competition with the interest of his ward.

The sale to Mr. Nelson was an illegal one, and the order of the probate judge confirming it will be vacated. In other respects, the order of confirmation will be affirmed. The appellants will recover their costs in the circuit court and in this court.

Steere, McAlvat, Brooke, and Stone, JJ., concurred.


author: Kuhn, J.

text:
    SOUTHWICK v. WAYNE CIRCUIT JUDGE.
    Appeal and Error — Settlement of Testimony on Appeal — Practice — Extension of Time.
    Mandamus will not issue to require a circuit judge to settle and sign as the record for use on appeal, in a divorce case and a suit consolidated with it, the minutes of the stenographer not condensed or reduced to narrative form (Chancery Rule 37). The application for mandamus may, however, be treated as an application to extend the time for appeal and further time be granted to condense the minutes of the testimony in compliance with the rule and to settle a case for review.
    Mandamus by William D. Southwick against George S. Hosmer, one of the circuit judges of Wayne county, to require respondent to settle a proposed case on appeal in two consolidated suits in equity.
    Submitted December 18, 1912.
    (Calendar No. 25,391.)
    Writ denied, but partial relief granted by order entered December 20, 1912.

      Sherman D. Callender and Arthur H. Covert {.Claudius B. Grant, of counsel), for relator.

      Clark, Lockwood, Bryant & Klein and Jasper C. Gates, for respondent.
   Kuhn, J.

This is a petition for mandamus to compel respondent to settle and sign a case on appeal in two cases which were consolidated and heard as one, wherein relator’s wife is complainant and relator defendant. One is a divorce case, in which the decree was entered January 26, 1912, and the other is a suit to set aside a deed from relator’s wife to himself, in which the decree was entered February 2, 1912.

Complainant having obtained relief in both cases, relator gave notice of appeal in accordance with the statute, and filed bonds to stay proceedings, which bonds were duly approved by the court. On account of illness of one of the counsel for relator, the time for settling the case for review was extended from time to time until July 25, 1912. On that day a motion was made asking for further extension of time, and on the hearing thereof respondent stated that he would hold the matter in abeyance 10 days, in which counsel should serve on complainant’s solicitor a copy of the proposed case on appeal. The proposed case was served on counsel for complainant on August 3, 1912, and consisted of the entire stenographic minutes; no effort having been made to reduce the testimony to a narrative form. The case was noticed for settlement for August 17, 1912, but because of absence of respondent, and also of counsel for relator, the case on appeal was not presented to respondent for his signature until September 28, 1912.

In his answer respondent sets up the following:

“ This respondent shows that the alleged case, as finally presented to this respondent for his signature, was, in no proper sense, a compliance with the requirements of Chancery Rule 37, for the following reasons:
(a) Said rule provides that any party shall be entitled to make and settle a case setting forth the substance of all the evidence taken or read at the hearing.’
“That said case, on the contrary, is merely the whole of the stenographer’s minutes, with copies of depositions annexed thereto constituting 663 typewritten pages, much pf which is repetition of the same testimony by the same witnesses, argument between counsel, remarks by the court, two detailed stories of a tour in Europe which the parties to this suit took as their wedding tour, talks between themselves and fellow passengers, and many other immaterial matters, all of which in a case properly prepared would have been condensed to less than one-half its present proportions.”

This court has condemned the practice of signing and returning immaterial and irrelevant matters in chancery appeals. Andrews v. Lavery, 159 Mich. 26 (123 N. W. 543). The respondent was justified in refusing to certify the record as presented to him. The petition for mandamus is therefore denied, with costs to respondent. However, for the purposes of this case, we shall consider and treat the petition filed as an application for extension of time to perfect an appeal. In order that relator may not be deprived of this right, an order will be entered extending the time to perfect the appeal to February 15, 1913, on condition that a case on appeal complying with the rules of this court be presented to the respondent for settlement on or before that date, and on the further condition that a further adequate bond to stay proceedings be filed by relator, to be approved in amount and sureties by respondent.

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