author: McAlvay, J.

text:
    McINTIRE v. CARR.
    1. Appeal and Error — Review—Directed Verdict.
    On error to a verdict directed against plaintiff, his evidence is entitled to the most favorable construction that it will bear.
    2. Pleading — Epeeot of Notice — Admissions.
    In an action on a contract, defendant’s notice of affirmative defenses whereby defendant admitted the execution of the contract set forth in plaintiff’s declaration, dispensed with the necessity of proving it or the provisions thereof.
    3. Same — Confession and Avoidance — Contracts.
    Defenses by confession and avoidance, having the effect of admitting the averments of plaintiff’s declaration, relieve him of the burden of proof.
    4. Damages — Evidence—Stock.
    Upon the question of damages, defendant’s notice admitting the execution of the alleged contract declared upon, and evidence showing the articles of incorporation of the corporation whose stock was to be issued to plaintiff under the terms of the agreement, and the reports to the secretary of State properly verified and filed, prima facie proved that the stock was worth par.
    Error to Saginaw; Kendrick, J.
    Submitted January 19, 1912.
    (Docket No. 122.)
    Decided October 1, 1912.
    Rehearing denied December 18, 1912.
    Assumpsit by Arthur E. McIntire against Henry W. Carr for the breach of a contract. A judgment for defendant on a verdict directed by the court is reviewed by plaintiff on writ of error.
    Reversed.

      John A. McKay, for appellant.

      Beach, O’Keefe & Bockwith, for appellee.
   McAlvay, J.

This is an action in assumpsit brought by plaintiff against defendant for a breach of contract, and in connection with the principal suit garnishee proceedings were begun against the People’s Savings Bank of Saginaw, Mich. The case was previously before this court on writ of error brought by plaintiff, and a judgment therein directed for defendant was reversed and a new trial ordered. The second trial has been had, resulting, as before, in a verdict directed by the trial court in favor of defendant. Plaintiff again brings the case here upon writ of error, asking for a reversal upon errors assigned. The case is reported in 164 Mich. 37 (128 N. W. 1079). The declaration upon which plaintiff relied appears in the opinion, as also does one of defendant’s notices of special defenses. The declaration was held by this court to state a cause of action. There were two opinions in the case. Both opinions sustain the contention of plaintiff that the case should be reversed, and agree that a new trial should be had upon the merits, and in no respect are they inharmonious. The contract sued upon and the claims of the parties are set out at length in the opinion.

On the second trial plaintiff offered in evidence the files and records in the case, and all the exhibits offered by him at the former trial. These exhibits were printed in the former record, and were considered in evidence over the objection of defendant that it was not a proper method of making a case, and the further objection to some of the exhibits of incompetency and immateriality. Plaintiff also offered in evidence the articles of association of the Henry W. Carr Company; also the annual report of said company of 1909, which were received over the objection of defendant. He also offered the annual report of the company for 1910, which was objected to and excluded as too remote. These new exhibits were offered upon the question of the value of the stock.

Plaintiff claims and alleges in his declaration that defendant was general manager of the Saginaw Milling Company and plaintiff was assistant manager of the same, both practical and competent men. At defendant’s solicitation, plaintiff resigned such position, relying upon defendant’s promises to organize a corporation with capital stock of $50,000, and that, in consideration of plaintiff joining with him in the enterprise, in return for his services, experience, and good will, he would give him 100 shares of stock in such corporation of the value of $1,000, the income of 500 shares of such stock for two years, and also the option to purchase 500 shares of such stock at par value of $10 per share. It was also agreed that plaintiff should be secretary of the corporation. A memorandum of this agreement was made and executed by these parties, which included all of the provisions above set forth, and provided a salary for plaintiff as secretary of $110 per month for the first six months! The corporation was duly organized, and the plaintiff was elected secretary and entered upon his service as such. This court, when the case was first brought before .it, determined that plaintiff’s declaration stated a cause of action. It also determined that no unconditional tender of the stock had at any time been made to the plaintiff by defendant. Upon the last trial plaintiff contends that a prima facie case was made by the pleadings and proofs offered by him.

A different view was taken by the court, and on motion of defendant a verdict was directed in his favor. Therefore the case plaintiffs presented before the trial court-must be given the most favorable construction it will bear in his favor. From the record it appears that the court determined that no proof was made of the contract, of its breach, or any resulting damages. Upon this view counsel for defendant based his motion for a verdict.

We will first consider as to the proof of a contract. It is plaintiff’s contention that by the notices of special defenses under the general issue the execution of the contract was clearly admitted. These- notices of special defenses, briefly stated, all relate to afiBrmative defenses, seven in number, and set forth such defenses with great particularity. They are: (a) Receipt and payment in full; (6) release and satisfaction; (c) the release by misrepresentation of plaintiff as to his ability and the profits arising from the enterprise; (d) recoupment; (e) set-off; (/) no demand before suit, and, after the commencement, a written notice to plaintiff that he had 100 shares of stock for him, and 600 shares had been transferred to him by the company for plaintiff, for which he was to receipt in full as a compromise; (g) that the enterprise was not profitable, and that, in that event, the instrument set forth in plaintiff’s declaration was not to create a liability. This contention of plaintiff is well taken. Such execution is, in terms, clearly admitted in the third, (c), beginning with the words — “That at and prior to the time of the execution by defendant of the instrument set forth in plaintiff’s declaration, the said plaintiff represented to the said defendant that he was competent,” etc., and again in the fourth (d), under the allegation that plaintiff’s services “performed for defendant were under the agreement by which the plaintiff represented himself to be competent.” Circuit Court Rule 7, providing for notice of affirmative defenses under the general issue, reads:

“ (e) Any statement of fact set forth in a notice added to a plea shall be treated as an admission by the defendant, and need not be proved by the plaintiff.”

Under this rule, the contract having been admitted, no proof was necessary of its execution or its terms.

It will not be necessary to consider special defense No. 6, for the reason that we agree with the disposition made of it in the former case. Mr. Justice Ostrander, in referring to the offer made by defendant of the 100 shares of stock — which, by the terms of the contract, plaintiff was to receive — and the 500 shares also provided for, of which plaintiff was to receive the profits for two years, the acceptance of such offer by plaintiff and its withdrawal after acceptance, in the opinion written by him, said:

. “This action, it seems to me, maybe regarded by plaintiff and the court as a withdrawal of the notice which has been referred to, leaving the cause to be tried upon the theory of the declaration, the plea of the general issue, and such special matters of defense as remain.” McIntire v. Carr, 164 Mich., at page 44 (128 N, W. 1082).

Next, as to the failure to perform the contract on the part of defendant. All of the notices of special defenses necessary to be considered are admissions of the contract, and of its nonperformance by defendant. These special defenses are all in the nature of excuses by confession and avoidance, showing why the contract should not be performed. It is proper to state that the seventh paragraph (g) admits the execution of the contract declared upon, and seeks to show a modification of the written instrument, proof of which would be inadmissible.

It is fundamental that defenses by way of confession and avoidance admit the allegations of plaintiff's pleading —in this case the declaration — and relieve him from the burden of proof.

“ The general rule undoubtedly is, that when an issue is properly joined, he who asserts the affirmative must prove it; and if the defendant by his plea confesses and avoids the count, he admits the facts stated in the count.”

This statement of the general rule appears in Simonton v. Winter, 5 Pet. (U. S.) 148; There was therefore no necessity, on a trial on the merits, for proof by the plaintiff of the facts and matters' covered by defendant’s admissions. Upon the question of the value of the stock, we think, from the contract itself, the articles of association and the reports filed with the secretary of State, as required by law, signed by a majority of the directors, including defendant, and verified by the proper officer, a prima facie case was made, showing, by substantive proof, that the value of the stock was its par value. Our conclusion is, therefore, that the court was in error in directing a verdict against the plaintiff.

The judgment of the circuit court is reversed, and a new trial granted.

Moore, C. J., and Steers,- Brooke, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


source: Caselaw Access Project

license: Public Domain

text:
    DORRINGTON v. CARPENTER.
    1. Fraud — Presumptions—Sales—Rescission.
    The burden of proof is upon complainant, who seeks to rescind a contract of sale for false representations, to prove fraud, which will not be presumed.
    2. Same — Evidence.
    Evidence examined, and held, to sustain the finding of the lower ' court that no fraud was proved.
    Appeal from Wayne; Donovan, J.
    Submitted January 29, 1912.
    (Docket No. 64.)
    Decided October 1, 1912.
    Bill by John Dorrington against Norman Carpenter for the rescission of a contract of sale for fraud. From a decree for defendant, complainant appeals.
    Affirmed.

      Fred G. Harvey, for complainant.

      Gray & Gray, for defendant.
   McAlvay, J.

Complainant filed his bill in the circuit court for Wayne county, in. chancery, against defendant, for the purpose of rescinding a certain contract of purchase of the steamer A. L. Hopkins, made by him from said defendant for the price of $13,000, of which $5,000 was paid in cash and the balance in two notes of $4,000 each, payable in one and two years, with interest, at 5 per cent, per annum, and secured by mortgage upon said steamer in the usual form, in which mortgage he agreed to keep the interest of defendant insured. He also seeks to recover the amount of cash paid by him, and to have the notes and mortgage canceled and delivered up, claiming such rescission on the ground of fraud perpetrated upon him by defendant in the false representations made to him, and upon which he relied in making such purchase; that the vessel was at Toledo, and he had never seen it. Said fraudulent representations, which induced such purchase, relative to the condition of said vessel, as in his bill of complaint charged, are as follows:

“ That said defendant represented to your orator that said steamer was in good, seaworthy condition, and was in first-class shape in every respect; that her boiler was a new one, only three years old, and that it would not be necessary to lay out any money for repairs to said steamer for a number of years; and that she could be gotten ready for carrying cargoes within 24 hours. Said defendant also represented to your orator that another party was anxious to buy said steamer, and that if your orator wanted her he would have to decide within 15 minutes.”

The answer of defendant denies the allegations of fraud and misrepresentation, and alleges that complainant was told by defendant that he (defendant) hqd no personal knowledge of the condition of the steamer; that he was not a vessel man, and relied on the statements of others, who claimed to know of such condition, and requested complainant to go to Toledo, where the steamer then was, and examine her for himself.

The case was heard, and a large amount of testimony was taken. The court found that the evidence in the case did- not support the fraud charged by complainant, and a decree in the case was granted defendant, dismissing the bill of complaint. The case is here for review on appeal by complainant.

The agreement for the purchase of this steamer was made April 8,1903, in a brief written proposition by complainant to defendant', which embraced the terms of the purchase already stated, which was accepted in writing by defendant. On April 10th the $5,000 payment was made, and the notes and mortgage executed and delivered. The parties resided in Detroit. Complainant is of the age of 40 years, of which he said he had sailed 25 or 27 years, and as master of a vessel for 18 years. Defendant is a business man of the age of 60 years, and connected with the Carnegie Steel Company as sales manager for their products in Michigan and Canada for 20 years. He was not a vessel man. This steamer and her tow were the only vessel property he had ever owned or was interested in, or with which he had any experience. The details of how he became the purchaser of this property are not material. The steamer, as the record shows, without dispute, was a wooden vessel, built at Marine City, Mich., in the year 1880, of 639 gross tons burthen. The record shows that the mortgage was foreclosed because of complainant’s refusal to renew the insurance under its terms, and the vessel was sold for a sum which, after paying the expenses of the foreclosure, left $412.88 due defendant on the transaction.

There is no disputed question of law presented in this case. The case was determined in the trial court entirely upon the testimony submitted at the hearing, which makes it necessary for this court to give a careful examination to the entire record. The complainant’s contention is based entirely upon his claim of the misrepresentation made to him by defendant as the condition of this steamer, upon which he relied and by which he was defrauded. To review and present an abstract of the testimony in this opinion would be of no benefit to the profession, and will not be undertaken. The principal parties disagree absolutely as to what occurred and what was said by defendant to the complainant at the time the sale was consummated. There is also some contradictory testimony on both sides, relative to the actual condition of the vessel. Complainant testifies that he never saw the vessel before the purchase, and says concerning it:

“ In a general way, I knew the 5 Hopkins ’ was an old boat.”

And also:

“ I would not expect to have a boat 22 years old in as good condition as it was at the time of construction.”

Defendant testified that he made no misrepresentation; that he told complainant that he had no personal knowledge of the boat, and received his information from those employed by him; that he told complainant to go to Toledo and examine the vessel, and denied that he made the statements claimed by complainant, which he relied upon and by which he was defrauded, at the time of the sale of the vessel, or at any other time.

The burden of proof was upon complainant to establish the misrepresentations and fraud charged against defendant by evidence sufficient to satisfy the court of its truth. This court has held repeatedly that fraud cannot be presumed, but must be established by a preponderance of the evidence; and the burden of proving it is upon the party who complains of it. This is so well settled that the citation of authorities is unnecessary.

We agree with the conclusion of the trial court that complainant’s charges of misrepresentation and fraud, were not established by the evidence.

The decree of the circuit court is therefore affirmed, with costs of both courts to defendant.

Moore, C. J., and Steerr, Stone, and Ostrander, JJ., concurred.


text:
    POWERS v. ROCKWELL.
    Taxation — Parties—Actions for Money Paid under Protest-Townships — Municipal Corporations.
    An action of assumpsit,,brought under 1 Comp. Laws, § 3876, 1 How. Stat. (3d Ed.) § 1831, for taxes paid under protest on the ground that the tax was illegally assessed for cement walks constructed on the grounds of the courthouse of Eaton county, must be instituted against the township as defendant; the township treasurer is not the proper party.

      Error to Eaton; Smith, J.
    Submitted April 3, 1912.
    (Docket No. 22.)
    Decided October 1, 1912.
    Assumpsit by Eugene Powers against Sidney S. Rockwell, treasurer of the township of Yermontville, Eaton county, Michigan, for the recovery of taxes paid under protest. Judgment for defendant; plaintiff brings error.
    Affirmed.

      Joseph 2?. Hendee and Bosslyn L. Sowers, for appellant.

      B. B. McPeele, for appellee.
   McAlvay, J.

Appellant brought suit against defendant, treasurer of the township of Yermontville, Eaton county, to recover in assumpsit the amount of certain taxes paid by him and his assignors to defendant as township treasurer, under protest. To the special count in the declaration filed in the case, defendant interposed á demurrer upon the grounds that this count of the declaration charged no legal liability against the defendant, and that it averred no cause of action. This demurrer was sustained by the trial court. The case proceeded to trial upon the common counts before the court without a jury. Requests for special findings of fact and conclusions of law were made in writing, and were found and filed by the court.

The facts in the case are not disputed. They arise from the action of the board of supervisors of Eaton county in authorizing the construction of certain cement walks within the courthouse square in the city of Charlotte, and certain curb and gutter constructed upon two sides of said premises, which is the property of the county of Eaton, and in including the sum of money paid for such construction in the taxes apportioned, assessed, and levied upon the taxable property of said county. Plaintiff and his assignors, claiming such expenditure to have been made without authority of law, being taxpayers in the township of Vermontville, paid the- amount assessed against their several properties under protest in writing, as provided by statute under which this suit was brought in assumpsit to recover the same. The court found, as a matter of law—

‘•'That, inasmuch as the taxes in question were paid under protest under section 3876 of the Complied Laws of the State of Michigan for the year 1897, the plaintiff’s remedy* if he had any, ^ould have been by suit against the township of Vermontville, and that plaintiff has no right of action against defendant.”

This question, as already appears, was first raised upon the demurrer to the first count, and was decided by the court in favor of the defendant. Later, during the trial before the court under the common counts, it was again raised by objection to the introduction of any testimony tending to hold defendant liable in this case, brought under the statute to recover taxes paid under protest within the time limited for such payment. The question was determined by the court in favor of defendant, as appears from the first conclusion of law, above quoted.

The right given to the taxpayer to pay under protest, and within a limited period thereafter to bring suit to recover, if such tax is shown to be illegal, is created by statute. This statute (section 3876, 1 Comp. Laws, 1 How. Slat. [2d Ed.], § 1821), as amended, provides as follows:

“Anyone * * * may pay any tax, whether levied on personal or real property, under protest to the treasurer, specifying at the time in writing, signed by him, the grounds of such protest, and such treasurer shall minute the fact of such protest on the tax roll and in the receipt given. The person paying under such protest may, within thirty days, and not afterwards, sue the township for the amount paid, and recover, if the tax is shown to be illegal for the reason specified in such protest.”

In the instant case this disputed tax was included by the board of supervisors in the contingent fund, and in due course was assessed under the general tax law against the property in the county. Its legality being questioned by plaintiff and his assignors, protest in writing was filed, specifying the grounds of such protest. From this record it appears, without dispute, that this suit is founded solely upon this statute. We agree with the learned trial judge that this suit could be brought only against the township, as the statute in terms specifically provides. This tax against which protest was made was assessed under the general tax law, and by its provisions, above quoted, the township was the proper party to be made defendant. This court has so held, and distinguished between cases brought under this provision of the general tax law and drain tax and similar cases. Taylor v. Township of Avon, 73 Mich. 604 (41 N. W. 703); Daniels v. Township of Watertown, 55 Mich. 376 (21 N. W. 350). Questions relative to thp validity of the action of the board of supervisors cannot be considered, for the reason that the proper defendant is not before the court.

The judgment of the circuit court is affirmed.

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


text:
    NASH v. MORRELL.
    Judgment — Res Judicata — Reformation of Instruments — Justices of the Peace — Replevin—Equity—Mistake—Chattel Mortgages.
    The judgment of a justice of the peace in replevin, determining that plaintiff mortgagor was not entitled to the'possession of the chattels mortgaged, because of defects in the instrument and of a mistake in the mortgage note as to the payee, is not conclusive of a suit in equity brought thereafter to correct the errors and to foreclose upon the security.

      Appeal from Allegan; Padgham, J.
    Submitted April 8, 1912.
    (Docket No. 63.)
    Decided October 1, 1912.
    Bill by Helen Nash against Marion E. Morrell and others to correct and foreclose a note and chattel mortgage. From a decree for complainant, defendants appeal.
    Affirmed.

      Charles Thew, for complainant.

      W. J. Barnard and W. B. Gardner, for defendants.
   McAlvay, J.

The bill of complaint in this cause was filed against defendant Morrell and wife for the purpose of reforming, correcting, and foreclosing a certain chattel mortgage, executed by them upon certain personal property, and for injunctive relief against all of the defendants. Defendant Warner is joined for the reason that some of this property was transferred to him by the other defendants after such mortgage was executed and recorded.

The facts relied upon by complainant to sustain her contention in this case are: That her husband, William A. Nash, had certain dealings with defendants Morrell out of which said defendants became indebted to Nash in the sum of $75, for which a note was to be given, with a chattel mortgage to secure the same, with interest at 7 per cent., payable one year after date; that the note and mortgage were drawn to William A. Nash; that before they were signed by Morrell and his wife, Nash, who drew the papers, remembered that under the law it was necessary for the mortgagors to make affidavit that it was made in good faith for an actual and adequate consideration, before the same could be received for record, which required the services of a notary public; that he was the only notary available, and he infqrmed the defendants Morrell and wife of that fact, and it was mutually agreed between the parties that the name of the payee and mortgagee in the note and mortgage be changed from “W. A.” to 5‘ Helen” Nash; that the change was made in the mortgage, but by mistake and oversight the change was not made in the note; that afterwards said defendants signed both papers and also copies of the same, and they were delivered at the time. Complainant contends, also, that the amount of the consideration, which was omitted in the chattel mortgage, which should have been stated at the sum of $75, the same as in the note, was by mistake and inadvertence omitted. There is no dispute in the record that this note añd mortgage were executed by these defendants at this time, or that the amount of $75 was a valid consideration, or that such indebtedness has not been paid.

Defendant Morrell and wife answered the bill of complaint, denying the claimed mistakes alleged therein and any indebtedness to complainant, but admitting that they were indebted to W. A. Nash in the sum of $75, with interest, alleging that the change made in the mortgage was made without their knowledge and after execution and delivery, and also that other property, without authority, was inserted therein after such execution; and they set up that a certain judgment rendered by a justice of the peace, wherein complainant was plaintiff, and brought in replevin for the recovering of this property against these defendants, is res adjudicata. The testimony in the case was taken in open court, and a decree was entered, granting to complainant the relief sought.

Defendants have appealed to this court, asking a reversal of this decree. Their entire argument is based upon the contention that the judgment in justice’s court, which was not appealed from, is res adjudicata in this suit.

The entire record of the justice’s court in the replevin case is not printed; but there seems to be little dispute as to what occurred in that case. This record shows that testimony relative to the facts claimed by complainant in this suit concerning mistakes, omissions, and alterations in the instruments was introduced in that court; but in our opinion that would hot be conclusive of the question raised. The only material fact before the justice’s court to be established by the plaintiff in order to recover in replevin was her right to the possession of the property described at the time suit was brought. It was found by the justice that she was not entitled to such possession, and judgment was rendered against her, as the record reads, “ on account of the inefficiency of the chattel mortgage forming the base of this action,” and a return of the property was ordered. Whatever reason the justice may have given for his conclusion is immaterial. If the claim of the complainant in the instant suit was within the jurisdiction of that court to take cognizance of and determine upon the merits, the judgment rendered would be conclusive and res adjudipata. That was an action at law, in which the plaintiff’s claim depended upon the contents of a note and chattel mortgage offered in evidence.

It appears in the instant case that the claim of complainant is of a purely equitable character, which could not have been considered or determined by a court at law. She seeks by this suit to reform and correct mistakes made in the two instruments and to foreclose the chattel mortgage. It goes without saying that no such relief could have been granted by the justice’s court. It follows that the judgment of the justice’s court is not res adjudicata in the instant case. Upon this proposition, as far as we have been able to discover from the authorities, in cases where claims or defenses which are of a purely equitable character, and therefore not properly cognizable at law, a judgment at law cannot be pleaded as res adjudicada in a suit in equity instituted to establish equitable rights. 23 Cyc. pp. 1222, 1317, 1172, and cases cited; Hawley v. Simons, 102 Ill. 115; Harper v. Campbell, 102 Ala. 342 (14 South. 650), cited and approved in Smart v. Kennedy, 123 Ala., at page 629 (26 South. 198), later reaffirmed in Southern R. Co. v. Cowan, 129 Ala. 586 (29 South. 985); Hills v. Sherwood, 48 Cal. 386; Arnold v. Grimes, 2 Iowa, 1; Love v. Belk, 36 N. C. 163; M'Clain v. French, 3 T. B. Mon. (Ky.) 385; Burchet v. Faulkner, 1 Dana (Ky.), 99; Conn v. Bernheimer, 67 Miss. 498 (7 South. 345); Dawson v. Parham, 55 Ark., at page 291 et seq. (18 S. W. 48), and cases cited; Appleton v. Harwell, 3 Cooke (Tenn.), 241; Bryant v. Hunter, 3 Wash. (C. C.) 48, Fed. Cas. No. 2,068. The rule was recognized in Dunham v. Downer, 31 Vt., at pages 256, 257.

We have examined all of the evidence in the case, and agree with the learned trial judge that the evidence of the complainant entitled her to the relief prayed for. The decree of the circuit court is affirmed, with costs against appellants, and the case will be remanded to that court for the purpose of executing such decree.

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

Ostrander, J. It is clear that complainant is granted relief, not under the mortgage and note relied upon in the replevin suit, but under a different (reformed) note and mortgage. The issue presented is not the one presented and determined in the replevin suit, and, as Justice Mc-Alvay has stated, could not have been determined in that suit. This disposes of appellants’ contention that the matter is res adjudicata, and is, it seems to me, the ground upon which affirmance of the decree should rest.

Bird, J., did not sit.


text:
    CHAPMAN v. BIBLE.
    Damages — Fraud—Stock—Sales.
    The measure of damaged for fraud of the vendor of corporate stock in representing its value to be greater than the true worth is the difference between the value that he represented it had and the actual value. Steele v. Kellogg, 163 Mich. 132 (128 N. W. 403), distinguished.
    Error to Ionia; Davis, J.
    Submitted April 9, 1912.
    (Docket No. 79.)
    Decided October 1, 1912.
    Case by Fred A. Chapman against John F. Bible and others for fraudulent representations. A judgment for defendant on a directed verdict is reviewed by plaintiff on writ of error.
    Reversed.

      Locke & Sheldon and George E. Nichols, for appellant.

      Scully & Davis, for appellees.
   McAlvay, J.

Plaintiff brought suit against defendants in an action on the case to recover damages suffered by him by reason of the fraud, deceit and misrepresentation of defendants upon which he relied, whereby he was induced to purchase certain stock in the Ionia Wagon Company, a going concern, located at Ionia, Mich., engaged in the business of manufacturing and selling wagons and like products. •

Upon the trial of the case, at the close of plaintiff’s proof, on motion of defendants, the court instructed a verdict in their favor, upon which a judgment was entered. The case has been brought to this court for review upon writ of error, and a reversal is claimed upon the ground that the court erred in granting defendants* motion and taking the case from the jury. The case made by this plaintiff, under the established rule where there is a directed verdict, will be construed by the court in the light most favorable to him, and it will be considered that the following facts were established on his behalf: In September, 1908, defendant Bible was general manager of the Ionia Wagon Company, in full charge and control of all of its business, with full knowledge of its financial condition. It was capitalized for $100,000 preferred and $150,-000 common stock. Defendant Rumsey owned 6,875 shares and defendant Bible 3,125 shares of the common stock. The latter also held possession of 6,850 shares of this stock belonging to Rumsey indorsed by him in blank, the certificates of which were contained in an envelope upon which was written in Bible’s handwriting, “ John F. Bible, $68,500 held in trust.” Defendant Rumsey also owned 4,050 shares of preferred stock. At this time plaintiff and Messrs. Ashdown, Thwaites, and Green were associated together in business at Ionia in the operation of the Ypsilanti Reed Furniture Company. On September 11, 1908, defendant Bible wrote Mr. Ashdown and his associates the following letter, offering to sell to them 10,000 shares of common stock for $25,000:

“Ionia Wagon Company, Manufacturers of the Bible Wagon. * * *
“ Mr. A. J. Ashdown — Confidential,
“Ionia, Mich.
“Dear Mr. Ashdown:
“ This panic has made me feel the importance of having others associated with me in the ownership of this business because in times of unexpected depressions it becomes necessary to borrow some money and as practically all I have is invested in this business I am not strong as a personal endorser when it becomes necessary to borrow some money. We have a prosperous business and last year things looked so rosy that we prepared for a largely increased business this year and in addition spent about $25,000.00 in new buildings, sprinkler and other equipments and instead of an increased business there has been a decreased business. Heretofore our business has been so strongly established that it has not even been necessary for us to employ traveling salesmen. Our business no year has shown a profit of less than 10 per cent, and some years has run'much higher. ■ I would like to have you and Messrs. Thwaites and Green and others of your friends associated with me in the management and ownership of this business and I am willing to make a tremendous sacrifice in order .to do it. If you should become interested I think Mr. H. R. Wagar would do likewise although I have not made him any proposition but he has always been very friendly with me and has great faith in the future of my enterprise. I simply want to make my company strong and have strong and aggressive men associated with me. Mr. Rumsey is getting to be quite an old man and do^s not give the business his personal attention. My books show that my common stock is worth about $166.00 for every $100.00 and on the most conservative estimate that could be placed it is certainly worth par in any way it could be figured but I realize that it could not be sold at par without I had others like yourself and Messrs. Gréen and Thwáites associated with me and in order to secure your interest I am willing to sell you controlling interest and take my chances with you and I am therefore willing to sell you $100,000.00 worth of my common stock for $25,000.00 or at 25 per cent, of its face value or at less than 15 per cent, of its actual value and on terms and conditions mentioned in my proposition enclosed. Our plant has been recently appraised by the Lemly Appraisal Co. and while I have not seen the figures I understand that the value of our plant and machinery is almost double what we carry it on our boobs. I put this in writing because I have implicit confidence in you and know you will not abuse it even if not interested. I have not made a like proposition to anyone else. We can consolidate with Lansing interests and get stock for our net assets as shown by the inventory and appraisal but this would take me from Ionia and give me a large and I am afraid unwieldy institution and I prefer to remain an independent institution, and an Ionia institution and to become strong with strictly local interests. The business has now all the rough edges knocked off and I am convinced can be made to pay 20 pe r cent, annually on the stock issue. If you think favorably of my proposition I will call and talk it over confidentially with you.
“Your friend,
“ John F. Bible.”

With the letter was inclosed a statement made by Bible, showing the condition of the Ionia Wagon Company December 31, 1907, according to which the net assets of the company were represented to be $347,500, and the surplus over stock and all other liabilities $109,000. On the same date defendant Bible submitted to plaintiff and his associates in writing the specific terms of the proposed sale to them, and a few days later, according to another inducement and promise offered to the proposed purchasers, caused a sufficient number of shares of stock (2,600) to be given to them for voting purposes to insure control of the business.

The evidence tends to show that the statement inclosed with the letter of September 11th was false, and that there was in fact a deficit. It also appears from the annual reports for 1905-07 that there was no surplus; that the value of the assets, as represented to plaintiff and his associates, had been largely exaggerated; that the indebtedness was $80,000. The evidence also shows that the purchase upon these representations made by defendant Bible was later consummated by plaintiff and his. associates. Plaintiff received one-quarter of the shares of stock purchased. The entire amount of the purchase price was $25,000, $5,000 of which was paid in cash and four notes of $5,000 each were given for the balance. An offer by complainant on the trial to show that Fred W. Green had been appointed receiver of the company, under which an appraisal of the property of the Ionia Wagon Company had been made, which had already been introduced, was objected to by defendants and excluded by the court. The motion for a directed verdict by defendant was then made, counsel for plaintiff admitting, for the purpose of raising the question of the measure of damages, that the stock was actually worth a little more than was paid for it. The court sustained the motion, holding that the proper measure of damages to be applied in the case was, as contended by defendant, the actual loss suffered, and that there could be no recovery for the so-called benefits of the bargain.

It is conceded in the briefs of counsel for both parties in this case that the only question to be considered is whether the court was in-error by this ruling upon the question of the measure of damages. From the case made by plaintiff, considered by us as established upon this hearing, it appears that this purchase by plaintiff and his associates of this interest in the Ionia Wagon Company was made by them upon certain representations in the letter of September 11, 1908. This letter contained material representations of fact upon which reliance was placed, and upon which the parties acted. It also-appears that such material statements and representations were false. It having been admitted by counsel for plaintiff in open court that the stock was of an actual value somewhat more than the price paid by plaintiff the court held that he' had suffered no damages, and could not recover. Upon this proposition we are satisfied that the court was in error. The weight of the authorities is to the contrary. Upon this proposition, we quote from an accepted authority, as follows:

“ With respect of the measure of damages which the defrauded buyer may recover, two rules seem to prevail. One, that the buyer may recover the difference between the actual value of the article as delivered and the contract price; the other, that he is entitled to the difference between the value of the article if it had been as represented and its actual value as delivered.
“ ‘ It is obvious,’ said the court in a recent case (Fargo Gaslt. Co. v. Fargo Gas & Elec. Co. [4 N. D. 219, 59 N. W. 1066, 37 L. R. A. 593), ‘ that these two rules cannot be reconciled. One gives to the party deceived the full benefit of the bargain. The other does not. We are clear that the best reason is with the doctrine that, where one is deceived and defrauded, he can recover as damages the difference between the value of what he would have obtained had the statement been true, and the value of what he actually received. This represents his actual loss by reason of the fraud of the seller, on the theory that he does not rescind the contract. Of course, if he sees fit to rescind for fraud, he can only recover back what he has paid. But if he desires to stand by‘the agreement, as he has a perfect right to do, he can logically say to the wrongdoer, “If you had told me the truth, the property would have been worth so much. It is not worth so much because it is notas you represented it. I demand that you make good the difference in money.” ’

“ The weight of authority seems clearly with the latter view.” 2 Mechem on Sales, § 1843, p. 1469.

This doctrine has been repeatedly announced and affirmed by this court. The following decisions are referred to: Page v. Wells, 37 Mich. 415; Jackson v. Armstrong, 50 Mich. 65 (14 N. W. 702); Smith v. Werkheiser, 152 Mich. 177 (115 N. W. 964, 15 L. R. A. [N. S.) 1092, 125 Am. St. Rep. 406). For a collation of the decisions of the several States which announce this doctrine, reference is had to 20 Cyc. pp. 132, 134.

Counsel for defendant is under a misapprehension as to the questions involved in Steele v. Kellogg, 163 Mich. 132 (128 N. W. 403), when he intimates that this court has there overruled its former decisions and announced the doctrine held by the trial court. In that recent case defendant appealed from a judgment against him, and in the paragraph which discusses the charge of the court upon the measure of damages his counsel relies on the Michigan authorities above cited, and in his brief states:

“ The court charged the jury, following the great weight of authority, that the measure of damages was the difference between the actual value of the stock when plaintiff bought it and what the stock would have been worth at that time if the representations had been true.”

The fault found with the charge of the court was that under it plaintiff was allowed to recover for bonus stock as well as stock actually paid for. The question involved in the instant case was not passed upon in that case. This case is squarely within the rule laid down in the decisions of this court above cited.

The judgment of the circuit court is reversed, and a new trial ordered.

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


author: •Moore, C. J.

text:
    WEST v. HUDSON.
    1. Brokers — Commissions—Contracts—Evidence.
    In order to be entitled to recover his commissions, a broker must show that he has completed his undertaking according to its terms, or that its completion was prevented wrongfully by his principal.
    2. Same.
    Evidence examined, and held, to warrant the trial court in submitting a loan broker’s claim for commissions, that his principal prevented him from earning, to the determination of the jury.
    Error to Wayne j Hosmer, J.
    Submitted April 4, 1912.
    (Docket No. 31.)
    Decided October 1, 1912.
    Assumpsit by George M. West against Joseph L. Hudson for commissions as loan broker. Judgment for plaintiff. Defendant brings error.
    Affirmed.

      Sloman & Sloman, for appellant.

      Henderson, Martindale & Grose, for appellee.
   •Moore, C. J.

Plaintiff, doing business in Detroit, brought this action to recover damages for alleged breach of contract in relation to the securing of a loan of $500,000. He recovered a verdict and judgment for $2,775. The case is brought here by writ of error.

The attorneys for the defendant presented 40 written requests to charge. The first of these called for a directed verdict in favor the defendant. Many of the others were substantially repetitions of the same propositions. None of them were given, except as covered by the general charge.

This charge is the subject of so many of the assignments of error, and it also contains a statement of so many of the facts contained in the record, that it is desirable to quote from it quite freely:

In the spring of 1908 the defendant, who held title to what is known as the J. L. Hudson Store, in the city of Detroit, desired to procure a loan for the benefit of his corporation, and he applied to Mr. West to procure, as a broker, such a loan for him. An application was made at that time to the Penn Mutual Life Insurance Company of Philadelphia, which was a written application, in part as follows :
“‘Detroit, Mich., May 5,1908.
“ * I hereby make application to the Penn Life Insurance Co. for a loan of 3500,000, payable at the expiration of five years, at four and one-half per cent, interest per annum, payable semi-annually, principal and interest to be payable at the said company’s office in Philadelphia, Penn., in gold coin of the United States of the present standard of weight and fineness, or in its equivalent at lender’s option, and state that application has not been and will not be made elsewhere until an adverse decision is rendered by said company, which is hereby given the exclusive right to take the proposed mortgage.’
“Under and by virtue of such an application, of course, it became the duty of Mr. Hudson not to make an application elsewhere until a reasonable time had passed to give the company a right to determine whether it would entertain that application. Now, nothing came of this; and this application is of comparatively slight importance, except, perhaps, gentlemen of the jury, it may throw some light on what occurred thereafter. At all events, the Penn Mutual Life Insurance Company of Philadelphia declined to make the loan as desired; and nothing seems to have been done thereafter until, I think, the month of December of that year.
“Thomas C. Perkins was a broker of Hartford, Conn., and some time in the month of December Mr. West proposed to make an application to the Travelers’ Insurance Company of Hartford, and he made that suggestion to Mr. Hudson; and I think the evidence would tend to show that he stated to him at that time that he still had in his possession the written application which had been made in the spring for a loan to the Penn Mutual Life Insurance Company, and that he would on that basis proceed to try to interest the Travelers’ Insurance Company in a similar loan. This application, as I said before, may be of some value in determining what was meant by the correspondence that thereafter took place between the plaintiff, Mr. West, and the broker, Mr. Perkins, in Hartford. Now, on the.; 5th of December, Mr. West, who naturally was_desirous of obtaining a commission, wrote to Mr. Perkins, the broker in Hartford, substantially as follows:
“‘Have you an outlet in your city for a $500,000 Detroit real estate loan on centrally located business 'property that has an appraisement of $1,100,000, the rate of interest not to be over 41% ? If your reply is, “Yes,” we can send you a signed application we now have in our possession.’
“On the 7th of December Mr. Perkins wrote to Mr. West a's follows:
“‘ It is barely possible that I might be able to place the loan you speak of, $500,000, on a centrally located business block in your city, but it would be impossible to place it at four and one-half per cent. If your client would care to accept four and three-quarters, I would put the application before one of the companies here who have shown some interest in the matter. This company tells me that they would not care to loan on the property unless it was strictly a business block. That is, they would not care to loan on it if it was a storage property, or if the property contained a theater or a brewery. If you will send me on full particulars with regard to the loan I will take it up at once upon receipt of same.’
“On the 9th of December Mr. West wrote to Mr. Perkins;
‘“In compliance with your favor of the 7th, we beg to hand you herewith inclosed an exact copy of the application we have on file for a loan of $500,000 made by Mr. J. L. Hudson, of Detroit.’
“ It was a typewritten copy, and did not contain an exclusive privilege, nor did it contain the five years time, nor several other things, but as a statement of the business property I think it was substantially a copy of the Penn Mutual application.
“ ‘We cannnot offer same at better .than 4|%, but feel quite confident that Mr. Hudson may accept 4|% if the matter is closed without delay. In regard to the payment of the principal this can be left entirely to your client. Mr. Hudson’s building is entirely surrounded by business blocks, and one public building, our public library. Please act promptly in regard to this loan as Philadelphia parties are seriously considering it, and might any minute close it up. If you have anything definite to say upon receipt of this letter, and should like to talk with us regarding it, wire us and we should be very glad to send some one to Hartford for an interview. The commission will be one-half of one per cent, if loan is made as per application. In all probability, however, we can do better than this if we have something tangible to submit to Mr. Hudson.’
“On the 10th of December Mr. Perkins wrote to Mr. West as follows:
“ ‘I am in receipt of your favor of December 9th, inclosing copy of application for a loan of $500,000 made by Mr. J. L. Hudson of Detroit. This loan is under consideration, and I can not find out definitely whether it will be favorably considered or not, as people put it up to me that they would let me know first if they would consider a loan of this size, and second, they would not consider it at 4i%, and if they would consider it at all it would be at 5%. If they do consider it I will not know anything definitely about it before Tuesday at the earliest, as there will be no meeting of their directors before that time.’
“On the 11th Mr. Perkins writes to Mr. West:
“‘The Hudson loan for $500,000 will be considered by the finance committee of the Travelers’ Insurance Company Tuesday. That is, they will let me know definitely if they care to make the loan. They say they will not consider this loan for less than five per cent.', so in case they tell me they are willing to take it on at that rate I will wire you Tuesday for instructions.’
“And on the 15th of December, 1908, a telegram, I think, was sent:
“ ‘ Travelers will send man to investigate loan if offered at 5%. Answer.’
“And Mr. West telegraphed to Mr. Perkins:
“‘Hudson refused loan offered by Philadelphia parties Saturday at 5%. Four and half best can do.’
“And on the 16th of December, Mr. Perkins wired to Mr. West:
“ ‘Best I can get is Travelers’ say they will reconsider loan at 4f next Tuesday meeting, subject to investigation if accepted. Wire if I can offer.’
“ On the 17th, Mr. West writes to Mr. Perkins of yesterday relative to Hudson loan with the Travelers’ Insurance Company and regrets being obliged to—
“Wire you today that Mr. Hudson will not accept a higher rate than 4J%. Since wiring you yesterday he has been approached by two eastern concerns represented by local people, who will consider the loan at four and half. If the Travelers’ Insurance Company wish a firm offer for a loan at their Tuesday meeting at 4J, let us hear from you and we will grant their requests if loan is not made in the meantime.’
“And on the 18th Mr. West telegraphed to Mr. Perkins :
“ ‘Hudson insists on 4J rate, at which figure he will close immediately.’
“And on the 19th Mr. Perkins wired to Mr. West in Detroit here:
“ ‘ Travelers’ want firm offering of the Hudson loan at 4J% for meeting Tuesday. Wire answer. ’
“And on that day Mr. Perkins wrote to Mr. West as follows:
“ * I am in receipt of your favor of Dec. 17, and note what you say in regard to Hudson loan. I wish to confirm the wire sent you today stating that the Travelers’ want a firm offering of this loan at their meeting which takes place next Tuesday and trust you will secure this offer.’
“ Later:
“ ‘ I am in receipt of your wire of even date and note that I' can offer this loan Travelers’ at their meeting Tuesday, and trust that we can push the thing through now.’
“A telegram addressed to Mr. Perkins on the 19th:
“ ‘ We can offer loan firm to Travelers’ for meeting Tuesday.’
“A letter on the same date:
“ ‘We beg to acknowledge receipt of your wire of even date stating that the Travelers’ wanted a firm offering the Hudson loan at 44% for their meeting Tuesday, and'we wired you granting request.’
“Now, gentlemen of the jury, the principal contention here, I think, is what is meant by the words ‘ firm offering,’ as it is used in that telegram — in these telegrams— particularly the telegram:
“ ‘We offer loan firm to Travelers’ for meeting Tuesday.’
“It is contended on behalf of the plaintiff in this case that the words loan firm to Travelers’ for meeting Tuesday’ meant that exclusive privilege, such as was contemplated in the written language embodied in the Penn Mutual Insurance Company, was given to the Travelers’ Insurance Company of Hartford; that is to say, that they should have the exclusive privilege of considering the loan, at least for a reasonable period, to enable them to determine whether they would take it or not. It is contended on behalf of the defendant in this case that the words ‘ loan firm ’ meant an exclusive privilege only for the Tuesday on which the finance committee sat. I think, under the testimony in this case as it has been given to you from the witness stand, and as you may deduce the meaning from the correspondence, it becomes a question for you to say what the exclusive privilege was that was given by this telegram. Did it mean, as contended by the plaintiff, that there was an exclusive privilege offered to the Hartford to take the loan, and that that should be an open privilege until at least a reasonable time had elapsed in which they might consider and determine it affirmatively; or did it mean, as contended by the defendant in this case, that the privilege extended only through the meeting of the finance committee, which took place? You have heard the testimony; it is for you to say what the truth is. It is for you to say what these words mean, used in the connection in which they are used.
• “The exact difference between the parties in this matter is this: If the plaintiff’s theory in this case is correct, it was incumbent upon Mr. Hudson, if the company accepted this loan at the meeting of the finance committee, to allow a reasonable timej not only for an investigation of the title, but also as to an investigation of the value of the property which was offered as security.
“The contention of the defendant is that if the loan was accepted on Tuesday — if the loan was accepted on Tuesday, then all that was open to them thereafter was the consideration of the title, and not an investigation as to the value of the property; and that a reasonable time existed only for that. Now; as a matter of fact, as you see from the deposition in this case, when the finance committee did meet on Tuesday, they passed at least upon the amount of the loan and substantially upon the terms of the loan. The application to the Penn Mutual Life Insurance Company of Philadelphia, was for a loan for five years at 4£ per cent, per annum; and in the minutes of the meeting of the finance committee there is this memorandum among the propositions which were submitted on that day:
“ ‘ Home Office. Joseph L. Hudson., $500,000 five or ten years at 4|- per cent, on business property in Detroit, lot 100 by 244, §566,000. Value of property, §669,444. Insurance, $400,000. Assessments, $397,610.’
“And opposite that in pencil, this being, I believe, the original- of the minutes of that meeting, is written the word, ‘Yes,’ from which, gentlemen of the jury, and the testimony, it must become apparent that the Travelers’ Company were willing to make the loan, in so far as the amount and the terms were concerned, as applied for, and that it was taken, subject, however, so far as they were concerned, to investigation of the value of the property and as to the title; and so I say to you, gentlemen of the jury, if you find in this case that the meaning of the words ‘firm loan’ or ‘firm offering,’ as they have been used in the writing here, mean that the exclusive privilege was given to the Travelers’ Insurance Company to consider this matter for a reasonable time, after having determined that the amount and the terms were satisfactory, then you will proceed to consider whether Mr. Hudson has violated, virtually violated, his agreement, in what took place thereafter, later in December — it matters not, I think, the date. It was stated to him — his attention was brought to the fact — that, while they were willing to accept the loan if satisfactory as to value and as to title, they were unable to send a man at once to make that investigation, and Mr. West, in substance, desirous to see if he could hold the matter over in that regard until January. Now you have heard what has taken place — the version of each, party as to what took place. It is contended on behalf of Mr. West at that time that he called upon Mr. Hudson, and Mr. Hudson told him he was negotiating with the Northwestern Mutual, and that he thought he ought to be permitted to save commissions, if possible, and that he wished he would string them along until he could determine whether that was possible or whether it was not.
“It is contended on behalf of Mr. Hudson that he told Mr. West at that time that he did not construe the correspondence as Mr. West did, and that in his belief that he was no longer bound; that the option had expired with the meeting o£ the finance committee; and that he was no longer holden, inasmuch as the money was not ready for him at that time.
“Now, it is for you to say where the truth lies, and to consider, gentlemen of the jury, in view of all the circumstances — if you find the theory of the plaintiff is right that this firm loan meant an exclusive privilege, after the action of the finance committee, for a reasonable time, to investigate as to the title and value of security — it is for you to say what was a reasonable time, and whether the action of Mr. Hudson in doing what you shall find, under the testimony, he did, precluded Mr. West from making the loan that otherwise would have come. In other words, was Mr. West prevented from making this loan in question ? And if, gentlemen of the jury, you find that his theory of the case, as I have outlined it to you, is correct, and that he was prevented while the option still existed to the Travelers’ Company, and that he was prevented from earning his commissions in that way, by the action of Mr. Hudson, why, of course, gentlemen of the jury, he is entitled to a verdict at your hands.
“And if, on the contrary, you find that the theory that Mr. Hudson has advanced here is the correct theory, that the words ‘ firm loan ’ or c firm offering ’ or whatever it is, meant only that so far as the security is concerned — the value of the property is concerned — the exclusive privilege or the right to consider extended only through the finance committee, why, of course, gentlemen of the jury, your verdict should be for the defendant. Or if you find, also, that a reasonable time had elapsed within which they should send a man to Detroit, and they failed to send a man to Detroit, and that, therefore, Mr. West was not prevented from making his loan by the action of Mr. Hudson, why, of course, then your verdict should be for the defendant. It is for you to say, having heard the testimony in the case, whether it shows that Mr. West was prevented in placing this loan or not.
“Now, at the risk of repetition, I think I will, perhaps, advert to one or two of the requests. I am asked to charge you in this case that if you find from a due consideration of all the evidence in the case that the exclusive privilege, whatever you may construe it, which was tendered for the 22d of December was tendered with the express understanding, through the writings, that an examination or investigation of the truth of the statements made in the application was to precede the final payment of the money to Mr. Hudson, and the taking of the mortgage to the Travelers’, and if you find that it was understood by the defendant and by the Travelers’ that such investigation was to precede such final action, then I charge you the defendant would not have the right, until such investigation were made and the application denied by the Travelers’, to procure a loan elsewhere, without the payment to the plaintiff of his commission, provided, gentlemen of the jury, you find that it was possible, under the circumstances of the case, to make this investigation as to the security and title within a reasonable time, because the question of reasonable time must, of course, be imported into this privilege, whatever it was, that was given to the Travelers’ Company; and if you find that the defendant declined to proceed with this application, a reasonable time not having expired, and find it established as above indicated, because he wished to save a commission, and negotiated a loan himself, he cannot now be heard to offer any other excuse for carrying out such contract. In this connection I charge you that, as a matter of law, the defendant had no right to refuse to carry out his contract, on the ground that he wished to negotiate a loan himself, and thus save the commission. You must either find in that regard, of course, that the option or the exclusive privilege, except so far as the examination of the title was concerned, expired with the meeting of the finance committee, or you must find, gentlemen of the jury, that, having been given, and the proposition of the Travelers’ Company embodied an unreasonable time in which to carry it out — in which to make the investigation — in either of which cases, of course, the verdict should be for the defendant.
“And I charge you in genera! that the rule relating to the right of a loan broker may be said to depend upon the same principles which govern the broker who undertakes to find a purchaser for property. The broker must show that he is able to do his undertaking according to its terms, and that its completion was prevented, without his fault, by his principal. For many cases no more satisfactory rule can be laid down than to ascertain: What did the broker undertake to do ? Has he completed that undertaking within the time and upon the terms stipulated, and if not, is the fault attributable to his own act, or to the interference of the principal ? And if, upon such inquiry, it should be determined that the broker has performed his undertaking within the time and upon the terms agreed upon, he is entitled to his commission; if he has not, he is not entitled to the commission, unless the performance was prevented by the principal, under circumstances which gave him no right then and there so to prevent it. And applying these general rules to this case, as I have said before, you will see the application thereof under the instructions heretofore given by me; and if Mr. West was prevented by Mr. Hudson from performing his full contract, or procuring the loan to be made, under the circumstances which gave Mr. Hudson no right, and sought to prevent it, then he is entitled to recover the reasonable value of the services performed in the matters above stated. In this case the circumstances which might so operate have already been pointed out to you.
“ Now, to advert to one or. more of the requests of the defendant, even at the risk of repetition, I may say, as I said at the outset, that from the evidence given by the plaintiff in this case he has not shown he has procured a party ready and willing to make the loan; and there is no recovery on that basis.
“Mr. Sloman: I understand your honor gives this as the law of the case ? *
“The Court: Yes; there is no question about that. There is no claim of that. I am asked to charge you in this case, and I do charge you, gentlemen of the jury—
“Mr. Henderson: I take an exception to the gentleman’s question.
“The Court: I am asked to charge you, and do charge you, that the burden is upon the plaintiff in this case to satisfy you, by a fair preponderance of the evidence, of his right to recover. There is no question about that. It is incumbent upon Mr. West to satisfy you of the very right of his side of the case; to satisfy you by what we call a preponderance of the testimony. When I speak of the preponderance of the testimony, I do not mean necessarily of the number of witnesses, gentlemen of the jury, because, if from the testimony which has been adduced here, both orally and written, you are satisfied of the very right of his side of the case, he has sustained the burden of proof; and, unless he does sustain the burden of proof, of course, gentlemen of the jury, the defendant is entitled to a verdict at your hands.
“ I am asked to charge you that before a loan broker who is authorized to procure a loan, and for which he is to he paid a commission, can recover, he must satisfy the jury, by a fair preponderance of the evidence, that he did procure a person who was ready, able, and willing to make the loan sought, and if he failed to do that he cannot recover, unless you find he was wrongfully prevented by the principal. I am asked to charge you that, although an agent employed to procure a loan may spend a great deal of time, and evefl money, in his endeavor to locate a party or parties who would be likely to make a loan, that that would! not entitle him to recover his commission. He must, unless prevented by his principal, bring to his employer a person ready and willing and able to make the loan in the manner and upon the terms authorized by his principal. This is unquestionably so. And so, unless he was prevented from carrying out — from procuring — the loan wrongfully on the part .of Mr. Hudson, of course, there can be no recovery in this case.
“I am asked to charge you that if the principal authorized him to procure a loan under certain terms and conditions, within a certain time, he cannot, by procuring a person who is willing to make a loan upon other or different terms, or upon other or different conditions, claim to have earned his commission, and be entitled to recover the same, unless his employer accepts such loan with such changes, so that any offer that he had, before these dealings, at 5 per cent, or 4f per cent, gives him no right of action whatsoever as against the defendant.
“I am asked to charge you that all the correspondence introduced into this case, prior to the 19th of December, 1908, can only be considered by you as throwing light upon the relationship between the plaintiff and defendant in relation to the loan, and I think that is so; that is the only object that they have in this case. The right to recover in this action must depend upon what occurred in December; for up to that time plaintiff could make no claim for what he had done, or claimed to have done, for procuring, or attempting to procure, a loan for the defendant.
“I am asked to charge you, and give it to you at the risk of repetition, that I may give the language of counsel : It is undisputed from the evidence in this case that on December 19, 1908, Thomas E. Perkins, a broker at Hartford, Connecticut, communicated to plaintiff by telegram as follows:
“‘Dec. 19, 1908. Travelers’ want firm offering, Hudson loan at 44% for meeting Tuesday. Wire answer.’
“ There seems to be no dispute that this telegram between the parties was submitted by plaintiff to the defendant, and he was authorized by the defendant to send to said Perkins a telegram as follows:
“ ‘Deo. 19, 1908.
“ ‘Thomas E. Perkins,
“ ‘Hartford, Conn.
“ ‘We offer Hudson loan firm to Travelers’ for meeting Tuesday.
“ ‘ Geo. W. West & Co.”
“ That on Tuesday, Dec. 22, 1908, said Perkins wired plaintiff as follows:
“ ‘ If investigation satisfactory Travelers’ will take loan 44%. Cannot send man to Detroit until between January 1st and 15th. Wire immediately if you can hold over.’
“Now I charge you that the telegram by Perkins, of December 22d, was not an unconditional acceptance of the offer, and even if Perkins was authorized to make it for the Travelers’, as submitted, the minds of the parties —that is, Mr. Hudson, on one hand, with his offer, and, on the other, the Travelers’ with its reply to such offer— never met on the terms of the defendant’s offer; and therefore the plaintiff could not recover a commission because of such offer of the Travelers’ Company. I think that is so; and, as I said before, whatever went after — if you should find from what went after that time, that there was such a preventing of the plaintiff from permitting the company to carry out the terms of what you shall find to be the exclusive privilege given by the telegram, then, and then only, is the plaintiff entitled to recover.
“ I am asked to charge you, and I think I have charged you, that, unless you find that Joseph L. Hudson, the defendant in this case, gave an exclusive option to Mr. West to place a loan at four and a half per cent, for a period beyond the 22d day of December, 1909, you must find for the defendant. If you should find that the word for Tuesday, in the telegram respecting firm offering, meant only during the continuance of that meeting, of course, the defendant would be entitled to your verdict; but if you find that the refusal or the exclusive option was to be given for presentation at that meeting, why, of course, gentlemen of the jury, that might be another matter, as I have already said.
“ I think, gentlemen, I have said all that is essential for me to say on the subject. If you find for the plaintiff, you will find such sum as, under the testimony in this case, you believe would compensate the plaintiff; otherwise, of course, the verdict should be a verdict for the defendant.
“Plaintiff claims in this case that he is entitled to recover the sum of $2,500, one-half of one per cent., and interest from, I think, well, say, the first of January, 1909. That, I think, is substantially near enough for the purposes of this case; and, under the evidence in this case, I think, gentlemen of the jury, it is permissible for you to give a verdict, if you find, of that sum, if you find the plaintiff is entitled to recover. .
“ I think I have said all that it is essential for me to say; and, unless counsel desire to call my attention to some things which I have not intentionally omitted, I think you may follow the officer.”

A great proportion of the brief of counsel for appellant and of his oral argument were devoted to the proposition that a verdict should have been directed in favor of defendant. In support thereof, counsel, cite Douville v. Comstock, 110 Mich. 698 (69 N. W. 79); Antisdel v. Canfield, 119 Mich. 229 (77 N. W. 944), and other authorities. In consideriúg this proposition, in addition to what appears in the charge of the trial judge, it should also appear that there is testimony from Mr. West that when thew-called “option” of December 19th was given, the defendant said:

“All right, go ahead; and if the Travelers’ did not come to a decision on Tuesday give them what time they want.”

In the testimony of the president of the Travelers’ Insurance Company appears the following:

“Q. Will you state whether or not, from and after December 22d, the Travelers’ Insurance Company stood ready to make an investigation as to the advisability of making this loan with reference to the value of the property offered as security, its title, etc.?
“A. Yes.
“Q. Will you state whether or not, if the facts had been as represented in this application, Exhibit 4, in reference to this property, in your opinion, the Travelers’ Insurance Company would have made the loan ?
“A. The finance committee approved the loan for $500,000 at 4£ per cent., subject to an inspection of the premises and confirmation of the value stated in the application or memorandum. It was my duty, as chairman of the committee, to complete the transaction authorized by the committee; and our manager of real estate loans, General Newton, would have been sent to Detroit to make the investigation. If his report had confirmed what was stated in the application, the loan would have been made on the terms proposed. The Travelers’ Insurance Company was financially able at the time to make a loan of this size.”

In the application to the Pennsylvania Mutual Insurance Company, it was stated that the value of the ground was $566,000, and of the building $669,444.60. This application was signed by Mr. Hudson. Attached to this application was a certificate of two expert real estate men, to the effect that they had carefully appraised the property, and that it was worth $1,235,000. '

It should also appear that, from Mr. Hudson’s testimony, while he had written to the Northwestern Life Insurance Company December 17th in relation to a loan, he did not procure a loan from them in December; and there was no evidence that Mr. Hudson procured a loan very long before the mortgage to the Northwestern Life Insurance Company for $450,000 was made, which mortgage bears date March 2, 1909.

When this testimony is taken into consideration, it will be seen that the instant case is easily distinguishable from the cases of Douville v. Comstock and Antisdel v. Can-field, supra.

There is not very much conflict as to the law applicable to a case of this character. The broker must show one or the other of two things: (1) That he has completed his undertaking according to its terms; or, (2) that its completion was prevented, without his fault, by his principal. See Mechem on Agency, §§ 620, 621, 968-970; Douville v. Comstock, supra; Antisdel v. Canfield, supra; Heaton v. Edwards, 90 Mich. 500 (51 N. W. 544); Young v. Hubbard, 154 Mich. 218 (117 N. W. 632).

It was the claim of plaintiff that he had found in the Travelers’ Insurance Company a party ready and willing to furnish the money to Mr. Hudson; and that, without his fault, Mr. Hudson prevented the accomplishment of this purpose, that Mr. Hudson might save the payment of a commission.

There was a sharp conflict in the testimony. The parties to the litigation contradicted each other as to the material facts. The case presented was one for the jury, and could not be disposed of as a question of law

Counsel claim (we quote from the brief):

“In a rather contradictory charge, the court, after indicating during the .trial that it was unlikely that the right of investigation of the property was not imported in the option, left it to the jury to determine what was meant by the term ‘ firm loan,’ whether it imported a privilege of a reasonable time to make an investigation of the security and title, and in the next breath charged them:
“ ‘ Because the question of reasonable time must, of course, be imported into this privilege, whatever it was, that was given to the Travelers’ Company; and if you find that the defendant declined to proceed with this-application, a reasonable time not having expired, and find it established as above indicated, because he wished to save a commission, and negotiated a loan himself, he cannot now be heard to offer any other excuse for carrying out such contract.’
“Assuming that the agency was exclusive, and that a reasonable time was imported in the option, did the defendant have the right to procure the loan himself, before plaintiff brought some one ready, willing, and able to make the loan on his terms? ”

If a reference is made to what precedes and what follows the quotation made by counsel from the general charge, we think the criticism that the charge is contradictory will fail. As has appeared already in what we have said, there is testimony, if believed, from which the inference can be fairly drawn that plaintiff had procured a party ready and willing to furnish the money, before the defendant had himself effected a loan.

We again quote from the brief:

“Assignment of Error. In making the remark in the presence of the jury:
“ ‘ The Court: It would be extraordinary for a loan to be made without an examination of the property.’
“ While this occurred during a colloquy between the court and counsel, the remark was necessarily prejudicial to the defendant. Jurors are only too prone to be influenced by the court’s view of the facts; and this court has so often called attention to the necessity of the circuit judge avoiding conveying his own view or impressions to the jury that it seems superfluous to cite cases. One of the principal issues involved was whether the option given carried with it the right to investigate as to the value of the property, and this remark of the court, while unintentional, would naturally foreclose the defendant’s claims before the jury.”

In view of the testimony, on cross-examination, of Mr. Hudson, and of the magnitude of the transaction, and of what we all know about business, we do not think this assignment is well taken.

Counsel complain about that portion of the charge which refers to the measure of damages, and insist there was no data furnished nor evidence given affording a proper basis for the amount of the verdict returned by the jury. We do not discover in the record that defendant offered any testimony upon that subject; nor do we find any reference to it in the many requests to charge preferred by counsel for appellant.

Immediately following that portion of his charge, the judge turned to counsel, and said: ,

“I think I have said all it is essential for me to say; and unless counsel desire to call my attention to some things which I have not intentionally omitted, I think you may follow the officer.”

Counsel remained silent as to the question of damages. The plaintiff gave direct testimony upon that subject. The correspondence and the other testimony indicated in some degree what was done and the magnitude of the transaction. We do not think it can be said there was error as to that feature of the case. The case was argued orally at length. Excellent briefs have been furnished us. The record has been read with care. We do not deem it necessary to discuss other assignments of error. The testimony was very conflicting. The theories of the parties were carefully submitted to the jury.

The judgment is affirmed.

Steers, McAlvay, Brooke, Stone, and Ostrander, JJ., concurred. Bird, J., did not sit.


author: Osteandee, J.

text:
    WILSON v. BRAY.
    1. Fraud — Sales—Deceit—Trial—Charge.
    Plaintiff and appellant, in an action for fraud and deceit employed to induce plaintiff to becdme the joint purchaser with others of a stallion, was not prejudiced by the failure of the trial court to instruct the jury what representations, if made, were important and controlling, or to charge them that one material representation, if made and relied upon, might be sufficient to warrant a verdict for plaintiff, whose claim as to the falsity of the statements-and the mating of fraudulent representations the court assumed to have been proved, not submitting either issue to the jury.
    2. Same — Evidence—Value.
    Evidence that the animal had, subsequently to the time of the transfer, shown his quality to be as represented, was admissible in connection with testimony tending to show that only by such experience and trial could his value be shown.

      Error to Ingham; Collingwood, J.
    Submitted April 10, 1912.
    (Docket No. 107.)
    Decided October 1, 1912.
    Case by William O. Wilson against Mahlon A. Bray for fraud and deceit. Judgment for defendant. Plaintiff brings error.
    Affirmed.

      Gardner & Hood, for appellant.

      8. L. Kilbourne, for appellee.
   Osteandee, J.

An association was formed for the purpose of buying and exploiting a Percheron stallion, three years old; each member of the association acquiring a one-twelfth interest therein and in the> horse. Plaintiff and defendant were members of the association. The purchase price of the horse was $2,400, and notes were given for this amount, executed by the members individually, later sued upon, and the judgment recovered paid. The horse was bought in March, 1903, and this action was begun in August, 1908, and tried in December 1910, resulting in a verdict and judgment for defendant. It is an action for damages for fraud and deceit, alleged to have been practiced by defendant in inducing plaintiff to become a member of the said association and one of the purchasers of the horse. The horse was sold to the association with a guaranty that he was a sure foal-getter and, with proper care and handling, a producer of good stock. It was. agreed by the vendor that if the horse was not as represented he would return the notes given for his purchase price, or replace him with another horse of the same breed. In joining the said association and becoming bound for the purchase price of the horse, plaintiff claims to have been wholly influenced by, and to have relied upon, certain representations made by defendant. These representations were that the stallion was a valuable animal for breeding purposes, a sure foal-getter, and well worth $2,400, and that a share in him and in the enterprise was a good investment; that he (defendant) was purchasing a one-twelfth interest in the horse, would sign the notes and be liable thereon as the other signers were. It is alleged that defendant, at the time he made the representations, knew that the horse was not worth to exceed $300, was not a good breeder or a sure foal-getter, but, having been employed and paid by the vendor to make the representations and to accomplish the intended deceit, he falsely appeared to be himself one of the purchasers of the horse, and to pay one-twelfth of the purchase price. The sum he paid, viz., $»00, had theretofore been paid to him by the vendor, with an understanding that he should be no further liable.

Defendant denied the making of any of the alleged representations. He admits having given his opinion, and insists, and produced testimony to prove, that his opinion was sound. That is to say., he contended at the trial that the horse was a good horse and a sure foal-getter, and that, with proper management, the investment would have- been profitable to the purchasers. He testified that he stated to plaintiff that he was employed by the owner and vendor of the horse to aid in disposing of him.

Usually,in a case of this character, it is the province of the jury to determine, first, whether the alleged representations were made, and, if made, then, second, whether they were false or true, and, if false, then, third, whether they were calculated to and did in fact influence the plaintiff to his injury. Curiously enough, what defendant said and the truth of whatever he said about the horse and the venture do not appear to have been questions submitted to the jury. The initial questions whether defendant made any material false statement about the horse or the venture are not suggested in the instructions to the jury. The nearest approach to it is in the following language:

“ In this case, to entitle plaintiff to a verdict, you must not only believe from the evidence that the false and fraudulent representations were made, but also that they were made under circumstances calculated to deceive a person acting with reasonable prudence and caution.”

On the other hand, the jury was told—

et That in forming a company or corporation every subscriber has a direct interest in the subscriptions, because all are contributing to a common object. The fact that one person binds himself to place a certain sum of money in the enterprise, taking the ordinary risks incidental to such a business venture, is an inducement to others to venture in a like manner. Any secret agreement between the company, or those organizing the company, and a subscriber, which changes the condition of his subscription is a fraud upon the other subscribers. If Mr. Bray entered into a secret agreement with Mr. Comstock which would change the terms of Bray’s subscription, and then Bray, without disclosing this secret agreement, induced Wilson to become a subscriber, and Wilson, relying on Bray being a bona fide subscriber, did actually become a subscriber, then Bray is liable for any loss or damage which Wilson may have sustained, and you must find him guilty.”

The errors assigned by plaintiff are based upon exceptions to rulings upon the admission of testimony, upon portions of the charge given, and the refusal to instruct the jury as requested. The brief for appellant contains a critical examination of portions of the charge which are singled out; some of the objections being generally well founded. But it must be admitted that the charge as a whole was favorable to the plaintiff. The language employed by the court assumes, in substance and effect, that the representations claimed to have been made were made, and were not true. The points to which the attention of the jury was directed were (1) whéther they were of such a character and made under such circumstances that a reasonably prudent person should have relied upon them, and (2), as to the alleged secret agreement, whether plaintiff, relying upon the terms of Bray’s subscription and his apparent equal interest and responsibility, was induced to join the association and pledge his credit.

A careful reading of the record, including the charge, has convinced me that plaintiff’s objections to the charge are met by the apparent assumptions indulged by the court, and by the very pointed instruction relating to defendant’s liability if a secret agreement existed between defendant and the vendor. It is true, as appellant contends, that the court did not state or point out what representations about the horse were, if made, important and controlling, and did not instruct that one material false representation, if made and relied upon, was, or might be, sufficient to justify a verdict. But, as has been said, the charge assumes that all of the alleged representations were made and were false — an assumption which was wholly unwarranted if the jury believed the testimony of defendant and his witnesses. In my opinion, the verdict should not be disturbed for any error in the charge, nor at all if improper testimony was not admitted.

With respect to the alleged objectionable testimony, it is-said that the issue was what was this stallion worth in March, 1903, and that testimony of his subsequent history and of the number and value of his foals was improperly admitted. The testimony, so far as it is contained in the record, is conclusive and quite agreeable with reason that the real value of a young breeding horse is a fact to be determined by his performances, and that his apparent value is determined by his individual excellence, his breeding, and promise. It is claimed that defendant represented as a fact within his own knowledge that the horse was a sure foal-getter. It does not appear how defendant could have had any such knowledge; but, aside from this, defendant undertook to prove .that, whether what he said was mere opinion, or was a statement of fact, the statement was in fact true. In view of plaintiff’s allegations and position, he had the right to prove it if he could. How ? Necessarily by proving that he got foals, and as many, the number of attempts considered, as other good horses. further, that the foals lived, were strong, and came to maturity, and were of such excellence that there was a market for them, in which they were sold at good prices. It is evident that time alone will demonstrate the value of such an animal for the purposes for which he was sold, and that it was not error to receive the testimony which tended to prove that this horse showed by performance that he was a sure foal-getter and good breeder. The testimony tended to prove, also, that the venture was one calculated to be, and which might have been made, profitable to the adventurers.

The judgment, upon the whole record, ought not to be disturbed, and is affirmed.

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