text:
    STEVENS v. STEVENS.
    1. Mortgages — Foreclosure—Accounting.
    In a suit by tbe wife of defendant to foreclose two mortgages wbicb ber husband bad given to her as security for money advanced to him, as complainant claimed, evidence considered, and held, to support ber contention.

      2. Same — Accounting—Equity.
    The defendant husband was not entitled to an accounting, where he abandoned the farm mortgaged and went to Canada, leaving his wife in possession of the farm and some of the personal property, in order to escape pressing obligations due to creditors and other mortgagees, and where he borrowed money from her from time to time and it appeared that the question of the amount obtained by the complainant from the farm was involved in an action on the law side of the court.
    3. Frauds, Statute oe — Parties—Oral Contracts — Part Pereormance.
    Where defendant had become incompetent and been committed to the charge of a guardian, and his wife claimed to hold various claims against him,' including two mort- ' gages upon his real property, of which she remained in possession, and where she orally agreed with his guardian and heirs to pay the heirs of defendant a stated sum for their interest in his property, giving notes to them for the agreed consideration, before a writing satisfactory to all parties had been executed, specific performance could not be granted the guardian of the husband in a foreclosure suit to which none of the heirs were parties defendant, and a cross-bill was properly dismissed even if the contract was enforceable.
    4. Contracts — Future or Contingent Interests — Public Policy.
    Agreements to sell or convey the prospective interests of heirs in their living ancestor’s estate are not regarded with favor and are rarely, if ever, sustained, without the consent of the ancestor, who is generally held to be entitled to know the situation of his heirs with reference to each other, to himself and his property. His insanity or. incompetency is not a ground for making an exception to the general rule.
    Appeal from Cass; Des Voignes, J.
    Submitted April 15, 1914.
    (Docket No. 36.)
    Decided July 24, 1914.
    Bill by'Agnes Stevens against Daniel W. Stevens for ■ the foreclosure of two mortgages. From a decree for complainant, defendant appeals.
    Affirmed.

      Clarence M. Lyle and Marshall L. Howell, for complainant.

      Stewart & Sabin and Stewart & Jacobs, for defendant.
   Steere, J.

This bill was filed on November 7, 1912, for the purpose of foreclosing two mortgages given by defendant on his farm of 288 acres located in Cass county, Mich., one for $5,000, given directly to complainant, and the other for $2,001.22, given to the Jones Exchange Bank, of Marcellus, Mich., but subsequently assigned to her. Owing to the fact that the principal was not yet due on the latter mortgage, and the.amount of interest in default was small, it was withdrawn from consideration by permission of the court, and on motion of complainant’s solicitor the bill was dismissed as to it without prejudice. Upon the hearing a decree was rendered foreclosing the $5,000 mortgage, given complainant, for the sum of $6,587.12, being found due for principal and interest accrued since said mortgage was given on April 20, 1909.

At the time of these proceedings defendant was mentally incompetent. An answer with cross-bill was filed by Samuel Stevens, his son and general guardian, admitting the' execution of said mortgage, but denying its validity and asserting it was without consideration, alleging that complainant had contracted to, purchase the interests of defendant’s heirs in said farm, had been in possession of and realized profits from the same, praying that said mortgage be declared null and void, and asking affirmative relief by an accounting, decree for specific performance of contract, and an injunction to restrain certain proceedings at law which had been commenced by her.

Defendant and complainant were husband and wife, having been married in the State of New York in 1904. He was a Michigan farmer, a widower well along in years, and had six children by his former wife, all living and of age when this suit was heard. She was then about 40 years of age, had not been previously married, was a resident of Canada where she owned some inherited property both real and personal, and had followed no occupation beyond helping in the household of her parents when they were living. She had little knowledge of business matters, her interests being cared for by an attorney and agent. She first met defendant at her sister’s home in New York, where she was visiting and where they were married a few months later. While their courtship was in progress defendant tested her sincerity by borrowing $1,500 from her. Immediately following their marriage she accompanied him to his farm in Cass county, where they thereafter made their home and lived as husband and wife until shortly before this suit was begun, excepting when he was absent in the Northwest at intervals as hereafter related. Complainant was without previous experience in farm life, but appears to have adapted herself to it and been a faithful helpmate to defendant, not only caring for his household but interested and helpful in farm matters. She testifies:

“When I went up there on the place with him, I had to do a little of everything. I had to milk, and I often fed the stock. I had never done that before. It seems I had to learn.”

Two children were born of the marriage, a boy and a girl, respectively 8 and 6 years old when this suit was heard.

Though defendant had a large farm with a full complement of stock, tools, etc., and was apparently operating on a rather large scale, his methods were such that he was not successful financially. His farm was mortgaged and he was in debt when married to complainant. This condition continued and his indebtedness increased. It is clearly shown that he continued to apply from time to time the test of loyalty he found so satisfactory during their courtship and frequently borrowed money from complainant. She not only helped him financially at different times by direct loans, but by paying items of his indebtedness and expenses of the farm. She is shown to have mortgaged her Canadian property at one time to raise money for her purposes in Michigan; the mortgage being yet unpaid.

There are four mortgages upon defendant’s farm, the one for $5,000 to complainant being the third, and the one for $2,001.22 which she holds by assignment being the fourth. Two earlier mortgages aggregate $6,000 principal, with considerable accrued interest.

As his obligations increased and creditors were pressing him, and about the time he gave his wife this third mortgage, defendant conceived the project of retrieving his fortunes by journeying to and locating upon land in the Canadian Northwest. To that end, in May, 1909, he took from his farm and loaded a car with supplies, farming implements, tools, stock, etc., including two spans of horses, and started for Alberta, leaving complainant at home to run the farm with what was left as best she could; the parting though not final test of her loyalty being the requisite money to pay freight on his car to Alberta. Defendant located 320 acres of wild land in Alberta and proceeded to subdue and improve the same, devoting most of his time and all the money he was able to secure to that purpose until 1911. He was back home from time to time and gave directions as to the management of the Cass county farm, but left substantially all the burden of it on complainant, and was constantly importuning her by mail for more money, in an interesting series of letters, freighted with accounts of the country and the hardships he experienced, prayers, profanity, and great expectations. Her style of correspondence was somewhat similar and responsive from her viewpoint, telling of her efforts and the troubles which beset her in trying to run the farm, complaining of his having notes “all over —’s creation,” at one time inquiring, in. answer to an appeal from him for more money, “what was the use of your leaving me here, knowing you was in debt to everybody?” In a letter written by him on February 28, 1910, to Mr. Jones, of the Jones Exchange Bank, where he had borrowed money, he throws some light on his reason for going West and his financial embarrassments. It is, in part, as f ollows:

“I suppose you think I never intend to sign your mote and answer your letter, I tell you-I don’t live in Michigan now. * * * It is almost 40 miles to town and the last three weeks it has stormed and blowed so bad "and the most of the time it has been •down to 38 and 40 degrees below zero and for 20 miles there ain’t a house on the road. * * * I told her (complainant) in the fall to go and see you. She wrote me she had been and seen you and fixed it up all right and I supposed it was satisfactory. * * * I am willing to give you a mortgage, but I would like it to run 6 years because I will not get the deed of the last 160 for six years. Then will sell out here or back in Michigan and pay up. * * * I came out here so as to save the home place. * * * If you will draw up or have one drawn up running six years, so whenever I can pay you $300 a year * * * that will give me a chance for my life and I will get the old lady to discharge her mortgage on the farm and take one out here. * * * Now I think between God and man I have agreed to do what is right. If you will send me such a mortgage I will sign it and send it back as quick as I can and if. she won’t do so, then I will come back and you may jump on the farm and take it.”

He was home three times in 1909 and once in the latter part of 1910, remaining during a portion of the winter, until March, 1911, and was back two weeks in August, 1911, and finally returned on December 4, 1911. During his absence complainant, at his request, undertook to keep an account of her receipts and expenditures in connection with the farm. This consisted of items jotted down in a book at irregular intervals, as she testified, to show “that I didn’t waste any of the produce of the farm or anything like that,”1 and for defendant to look over when he came home. He is shown to have examined and approved them at different times when home, with the exception of the last year. In that connection it is urged that defendant is entitled to an accounting, because complainant is shown by her own books to have received several thousand dollars from the proceeds of the farm for which she has not accounted. That question is also-involved in an action on the law side of the court, brought by her to recover for money loaned defendant during the time he was in the West, subsequent to the date of the $5,000 mortgage here involved. It is sufficient for the purposes of this case to state we are well satisfied nothing is shown in that connection for which she should be called upon to account in the foreclosure of this mortgage. It appears from the record that complainant, a woman with limited knowledge of farming and little experience in business, had been trying for nearly three years to maintain and run this farm, after it had been partly stripped of stock and tools by defendant, at the same time, and while supporting herself and children, sending him money in response to his urgent importunities frequently and in considerable amounts as his written acknowledgments and other written evidence shows. We are convinced, under the facts proven, that she could not and did not accumulate any reserve fund, at least beyond that she sent defendant, out of the proceeds of this farm, which he writes he went West to save from his creditors and which he apparently had been unable to run profitably when in charge.

We fully agree with the conclusions of the learned circuit judge that this mortgage represented money loaned by complainant prior to its date and which was never paid, either principal or interest; and that defendant is not in this suit entitled to any accounting in relation to her management of the farm.

The only remaining question urged by defendant is the alleged contract between complainant and defendant’s heirs.

Shortly after defendant’s return home in the fall of 1911, he suffered a stroke of paralysis, as a result of which he became incompetent and sank into a helpless condition both physically and mentally, his mind and memory so impaired that he was incapable of transacting any business or even caring for himself. Complainant was desirous of having him sent to an asylum, but his son Samuel Stevens, who lived in Battle Creek, objected to this course, and being appointed guardian by the probate court took his father home with him, and as guardian proceeded to take charge of his estate. He assumed to have control of, and direct operations upon, the farm during the summer of 1912, though residing in Battle Creek. Complainant continued to live upon the farm as before and participated more or less in what was done there, boarding the hired help without pay and furnishing much of the family supplies, though it appears to have been recognized that he was in authority as guardian. The heavy indebtedness of the estate and unsettled condition of affairs were a general source of anxiety, uncertainty, and dissatisfaction. In the early part of the summer she conferred with the guardian, Samuel Stevens, another stepson named James Stevens, and a son-in-law of her husband named Frank James, as to the debts and difficulties which surrounded the estate and the surplus, if any, which might be realized above the growing indebtedness. A proposal was broached to her by one or more of them that she buy out her husband’s heirs and take the assets for whatever equities there might be. She at first favored their proposal, and after listening to their appraisal and plan of procedure agreed that she would buy out the six stepchildren for $3,000, or $500 each, they to make her a proper transfer of their interest as heirs of defendant’s estate in Cass county, but subsequently decided not to do so and refused to consummate the deal. The subject was, however, broached occasionally and discussed persuasively by the son-in-law until she again, in September, concluded to buy the heirs out. James undertook to procure their consent to take $500 apiece, and stated to her he had been told by the guardian that he would have nothing to do with it unless she put up something to show she meant business. She agreed to give notes for the amount; and he drew up five notes for $500 each. Having some time before loaned over $500 to the guardian, she signed no note for him. It is claimed and denied that the guardian thereupon surrendered control and possession of the property to her. There is evidence that some steps were taken to that end, though to what extent is uncertain, as she had been living upon the farm and participating in its affairs all the time, and the guardian had been away, except for occasional visits, attending to his own business affairs in Battle Creek. A contract was prepared providing for the sale and purchase of the prospective interests of the six stepchildren and signed by them; but, when it was presented to complainant, she claimed to have learned in the meantime that she had been deceived and misled as to their rights and conditions generally. She refused to sign the contract and, on October 22, 1912,' demanded back her notes from James to whom she had delivered them, and he refused to comply. She thereafter, on November 7, 1912, filed this foreclosure bill and began an action in attachment against her husband. Of this contract the learned circuit judge said and found:

“It is plain to me also that the complainant, the wife of the defendant, is a woman not versed in the a,ffairs of the business world and has had but very little experience in that respect in former years; that she was ignorant of the law and of her rights in this case. I further find that while she was appointed guardian for her two minor children, the issue of her marriage with the defendant in this case, which children are five and six years years of age, that the proceedings had in the sale of the land in this case did not contemplate or secure to these children the rights which they are entitled to under the statute. I think that the notes which were given and held by Frank James, who by the way is a son-in-law of the defendant, were given without consideration, and that the contract which was therefore to be made and executed and the giving of which these notes were based upon, although not signed or even executed was in fact not in accord with the oral arrangements in either the first or second so-called contract of agreement. * * * Defendants have failed in their cross-bill to maintain any right to compel the performance of this oral contract and agreement.”

While it might be contended with some force under certain circumstances that this contract had progressed to a point of performance which relieved it from the statute of frauds, the facts-in this case fully sustain, in our view, the final conclusion reached by the trial court. None of the heirs of defendant are parties to this suit. His guardian asks for him specific performance of an alleged contract to which he was not a party, to which he did not and could not consent; its purpose being to dispose of prospective interests in his estate before he was dead. Even were it an enforceable contract, it was not made with any party to this suit.

This contract contemplated a sale of-a prospective interest by heirs apparent, a sale void as a rule under the common law, sometimes enforced in courts of equity and more rarely, under the doctrine of estoppel, in courts of law. Such sales, as a rule of public policy, are not regarded with favor, and are rarely, if ever, sustained without the consent of the ancestor where that question is raised; the reason being that the ancestor is entitled to know the situation of his heirs with reference to each other, to himself, and his property, and by keeping him ignorant of the sale he is unwittingly led to leave his property to a stranger without his knowledge or consent, which operates as a fraud on the ancestor.

This question is fully discussed, with many authorities cited in the annotations to McCall v. Hampton, 98 Ky. 166 (32 S. W. 406), where reported in 33 L. R. A. 266 (56 Am. St. Rep. 335), and need not be elaborated here.

Under the general rules upon this subject to be drawn from the leading authorities, we conclude the contract under consideration is not enforceable either at law or in equity. The principles applicable here are concisely stated in the syllabus (which is borne out by the text) of McClure v. Raben, 133 Ind. 507 (33 N. E. 275, 36 Am. St. Rep. 556), as follows:

“Where a person conveys his expectant interest in his ancestor’s estate, such contracts being regarded with disfavor by the law, and as against public policy, before such contract can be enforced it must be alleged and proven that there was neither fraud nor oppression, and that the ancestor had knowledge of such contract, and acquiesced therein, and the fact that the ancestor is insane, and incapable of consenting to the contract, constitutes no exception to the rule.”

The decree is affirmed, with costs.

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


source: Caselaw Access Project

author: Steere, J.

license: Public Domain

text:
    STEVENS v. STEVENS.
    1. Appeal and Error — Consolidation op Causes — Practice — Equity — Foreclosure op Mortgages.
    Although counsel for all parties consent, it is not permissible to consolidate, on appeal, a foreclosure suit in equity with an action at law in attachment, involving practically the same facts and evidence, but different questions of law, where the parties insist upon their equitable, legal, and technical rights in both proceedings, and numerous assignments of error are urged, the questions involved in the chancery cause being distinct from those raised in the action at law.
    2. Witnesses — Matters Equally Within Knowledge op Deceased — Incompetency—Evidence—Guardian and Ward.
    The court is not at liberty to interpret the statute declaring incompetent the testimony of a party or agent as to matters equally within the knowledge of decedent (3 Comp. Laws, §10212, 5 How. Stat. [2d Ed.] § 12856), so as to exclude testimony of an opposite party as to matters known to an incompetent under guardianship.
    3. Same — Husband and Wipe — Privileged Communications.
    Testimony of the wife, relating to her claim against her husband for money that she had loaned to him before he became incompetent mentally, was admissible, in an action for the recovery thereof, and was not excluded by the provisions of 3 Comp. Laws, § 10213 (5 How. Stat. [2d Ed.] §12857), which excepts testimony in relation to separate interests or property of either when the other is a party to the record.
    4. Same — Evidence.
    In an action to recover money loaned by the wife to her husband, it was erroneous to permit the plaintiff to testify to details of the domestic relations of the parties, and of other financial transactions with members of his family, who borrowed money from her, and it was prejudicial to receive testimony of another witness tending to show-defendant’s purpose to obtain the money of plaintiff, in marrying her.

      Error to Cass; Des Voignes, J.
    Submitted April 15, 1914.
    (Docket No. 35.)
    Decided July 24, 1914.
    Attachment by Agnes Stevens against Daniel W. Stevens for money had and received. Judgment for plaintiff. Defendant brings error.
    Reversed.

      Stewart & Sabin and Stewart & Jacobs, for appellant.

      Clarence M. Lyle and Marshall L. Howell, for appellee.
   Steere, J.

This action was begun by a writ of attachment issued out of the circuit court of Cass county, November 7,1912, on the strength of an affidavit made by plaintiff, alleging that:

“This deponent further says that he (she) has good reason to believe and does believe that the said Daniel W. Stevens is about to dispose of a portion of his property with intent to defraud his creditors,” etc.

Plaintiff and defendant were husband and wife, and said Daniel W. Stevens was then hopelessly demented, totally incapable of transacting any business, and under guardianship of his son, who had given a bond to the probate court for the faithful performance of his duties as such.

Plaintiff and defendant were married in 1904, she being his second wife. Defendant was then and continued to be the owner of a farm in Cass county consisting of 288 acres, where they resided from the time of their marriage until about the time of commencing this suit, with the exception that from 1909 to 1911 defendant spent much of his time in the Canadian Northwest, where he took up and was improving a 320-acre tract of land. During his absence plaintiff remained upon the farm in Cass county, managing the same, and sending him money from time to time. This action is to recover the amount of loans claimed to have been made him during that period.

After defendant’s return from the Northwest in 1911, he suffered a stroke of paralysis from which he did not recover, and in the spring of 1912 his mental condition was such that it was deemed necessary to appoint a guardian for him, and his son Samuel Stevens, plaintiff’s stepson, was appointed and proceeded to take charge of his business affairs. Plaintiff and defendant were then residing upon the Cass county farm, and owing to his demented condition she desired him sent to- an asylum for the insane, to which the son objected and took him to the son’s home in Battle Creek. Strained relations developed between plaintiff and her husband’s guardian and other stepchildren which resulted in litigation, and under this attachment she seized all tools, stock, crops, and other personal property on said farm, where she then resided, inventoried at $2,613.75.

When plaintiff and defendant married she was a woman of some means, and he borrowed money of her from time to.time. Defendant, though apparently a man of some business ability and energy, was prone to indebtedness to the extent of his credit. On November 7, 1912, the same day this action in attachment was begun, she also commenced a suit in chancery to foreclose two mortgages which she held upon the Cass county farm, one for $5,000 given her by defendant, April 20,1909, and another of something over $2,000 originally given by defendant to a certain bank and subsequently assigned to her. The son as guardian assumed the active defense in this litigation and has removed both cases to this court by appeal. The record of the foreclosure suit goes very fully into the domestic and business relations of these parties during their married life, and much of the matter there contained is duplicated in this case.

It has been suggested in counsel’s brief on the one side and acquiesced in on the other, if it can be done, that the two cases should be considered and disposed of together. Inasmuch as one of the cases is a chancery suit, to be heard here de novo, and the other an attachment proceeding on the law side of the court, in which only questions of law are considered, and parties insist upon not only their equitable but all legal and technical rights on all questions involved, with 94 assignments of error urged and argued here, there seem to be insurmountable obstacles to following such suggestion.

Plaintiff’s claim in this case relates entirely to numerous items of money alleged to have been loaned to defendant, mostly while he was in the Northwest, between 1909 and 1912 inclusive, of which a bill of particulars was demanded and filed; it being conceded and asserted by her that all money she loaned him prior to his giving her the $5,000 mortgage was included in said mortgage. On trial of the case in the circuit court by jury, a verdict and judgment were rendered and entered for the sum of $2,574.38, in plaintiff’s favor.

We are impressed from reading this record that, for the issue involved, the evidence took a remarkably wide range over the domestic and business relations of these parties, touching on remote subjects, which in certain instances were rather calculated to mislead and prejudice than to enlighten the jury on the real issue.

The distinct issue on this trial was the amount of money, if any, loaned by plaintiff to her husband, after the date of the $5,000 mortgage and exclusive of that covered by it. Items set out in a bill of particulars were the proper subjects of inquiry. The difficulty of limiting the testimony to that legitimate line of inquiry, where the real parties litigant were a second wife and adult stepsons and stepdaughters, at variance over the estate of a husband and father, who, though yet breathing, was dead to the world, is not to be ignored, and parts of the testimony apparently immaterial can be passed by as not necessarily prejudicial.

We are, however, forced to the conclusion that certain of the testimony laid before the jury was foreign to the issue, of a character tending to create sympathy and prejudice in plaintiff’s favor, portions in violation of section 10213, 3 Comp. Laws (5 How. Stat. [2d Ed.] § 12856), which precludes husband and wife testifying for or against each other except in certain instances, and taken as a whole, palpably gave a coloring to the' case by violating those rules of evidence deemed essential to an impartial jury trial.

Defendant was shown to be physically and mentally helpless and incompetent, his mind and memory gone, totally incapable of furnishing any information upon the matters in litigation, and was defended by his “personal representative,” the son, who had been appointed his guardian. It is contended that all the reasons for the statute (section 10212) protecting the estates of deceased persons by precluding the opposite party from testifying to matters equally within the knowledge of the deceased are here applicable, and the statute should be applied, in cases where the opposite party is hopelessly insane — mentally deceased — and equally incapable of testifying. This is strictly a statutory provision. Insane persons are not “deceased persons.” Courts are not at liberty to read into the statute and pass upon degrees of insanity. If the reason for the statute applies to those mentally incompetent, it is for the legislature and not the courts to supply the statute. But the reasons thus urged suggest the necessity of particular care in cases of this kind, where the defendant is silenced by his afflictions, to restrict the opposite party to clearly competent evidence, to the exclusion of all irrelevant testimony which might be prejudicial. •

The exception to said section 10213, which allows a husband or wife to testify against the other in relation to their separate property or interests, has been often and liberally construed by this court; but the rule stated in Hunt v. Eaton, 55 Mich. 362 (21 N. W. 429), that “no communications passing between husband and wife in the confidence of married life can be given in evidence by either without the other’s consent, unless they relate to the title of separate property in litigation between them,” has not been departed from. Plaintiff was entitled to testify fully as to communications with defendant relating to issues in this case, as made by the items in her bill of particulars. None of these matters arose before 1909. She was allowed to testify that her husband knew she had money before she married him, that she had loaned him $1,500 before that event, that he told her he had a farm of 200 acres, and she “commenced to learn he was in debt in the spring of 1905, some six or seven months after our marriage,” that his farm was mortgaged for some $10,000 or $12,000 at that time, and permitted to relate the details of their business and domestic relations from that time on, including not only the assistance she claimed to have given defendant but other members of his family. She testified to loaning money to “Sam Stevens,” defendant’s guardian, saying:

• “He owes me in the neighborhood of $600 now, that I loaned him. * * * At times I would loan Jim; that is his other son. One time he was going to his uncle’s funeral and he didn’t have any shoes, and I gave him $5 to get shoes. * * * When his daughter went out, that is Alvina, I loaned her $20 to go with, * * * and various other times I helped her.”

While this line of examination was progressing against defendant’s objection, and her counsel had asked, “Q. Were any of these loans repaid?” and she answered, “Never,” the court remarked, “That doesn’t tend to show the loan in this instance, does it?” her counsel replied, “No, but it tends to show the fact that she had the money at that time that she could loan and tends to show the fact further that they had need to borrow.” A neighbor’s wife, who had known defendant for 30 years, was allowed to testify, without giving exact dates, but apparently with reference to about the time the parties were married:

“Well, he first spoke to us about getting money because he wanted to go and get her because she had money and' he had to have money.”

And again:

“Well, he told us he had got her money. * * * He said he was going to have her sell all her- real estate and bring her money down here.”

Without going further into the details of such testimony, we are well satisfied that much of the evidence of that character was not material to the issue, and in no respect tended to prove any of the different items set out in plaintiff’s bill of particulars, and was prejudicially calculated to create the impression plaintiff was a victim of, and being exploited by, defendant and his family, as well as in some instances being in violation of the statute relative to husband and wife testifying against each other.

The latitude permitted, along the lines pointed out, on the stated theory that “there is no other way to get at the truth of the matter only to get the whole thing béfore the jury,” should not be extended to irrelevant and immaterial things relating to other times and persons. The evidence should have been more strictly confined to the legitimate and distinct issue presented by the pleadings. We are constrained to hold that the issue before the jury was colored and confused with collaterial issues and incompetent, prejudicial testimony subversive of a fair and impartial trial.

The judgment is reversed, and a new trial granted.

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


author: STEERE, J.

text:
    ENSIGN v. DUNN.
    1. Bills and Notes — Execution—Admissions—Evidence.
    The maker of a note signed by her husband, with the qualifying phrase “as surety,” admitted the execution of the note where she did not deny it under oath, and testified that she signed the instrument, and she must be held to have executed it in the manner and form alleged and as shown by the instrument, she as principal and her husband as surety.
    2. Same — Evidence.
    The fact that the husband signed the note “as surety” under his wife’s signature may be regarded as of significance in determining her relation to and participation in the transaction for which the note was given, namely, the purchase of a lighting plant to be installed upon property that she had an interest in.
    3. Same — Parties—Sales—Conclusions—Evidence.
    Defendant’s testimony that the note was given for a lighting plant which was installed in her mother’s home and that the witness signed the note, but the husband was the one who purchased such plant, was a conclusion.
    4. Same — Husband and Wife.
    If the note was given for a debt of her husband it would be void as to her, no matter in what capacity she or he signed it.

      5. Same — Separate Estate oe Married Women.
    If the plant was purchased either by her or by her husband for her, to be installed as a fixture on realty in which she had an interest and her husband none, the note given for the purchase price was valid.
    6. Estates — Contingent Interests — Remainders.
    If it is possible to construe an estate as vested rather than contingent, the law favors such construction. 3 Comp. Laws, § 8795 (4 How. Stat. [2d Ed.] § 10635).
    7. Same — Wills—Vested Remainder.
    An estate in a farm created by the will of defendant’s father, which devised to the widow, her mother, a life interest, and provided defendant and her sister should have the remainder in equal shares if both survived the life tenant, if not, to the survivor, and if neither survived, to testator’s nearest relative, was a vested, not' a contingent, interest, subject to be defeated" by the death of the devisee of such remainder.
    Error to Jackson; Parkinson, J.
    Submitted April 20, 1914.
    (Docket No. 85.)
    Decided July 24, 1914.
    Assumpsit by Charles B. Ensign against T. C. Dunn and wife on a promissory note. Judgment for defendants. Plaintiff brings error.
    Reversed.

      J. M. Hatch & Son, for appellant.

      B. H. Bossman, for appellees.
   STEERE, J.

This action was brought in the circuit court of Jackson county upon the following promissory note:

“Jackson, Mich., Feb. 17, 1909.

“One year after date I promise to pay to the order of W. S. Hunter, Jr., ($200.00) two hundred dollars at the office of-. Value received, with interest at five per cent, per annum until paid and attorney fees if not paid at maturity.

“Mrs. T. C. Dunn,

“Mr. T. C. Dunn, Surety.

“Address, Jackson. Mich.

“R. R. No. 4. Due 2-17-10.”

Indorsement on the back:

“W. S. Hunter, Jr.”

Plaintiff’s declaration was upon the common counts in assumpsit, with notice that under the money counts said note would be given in evidence, a copy of which was attached to the declaration.

The record does not disclose whether Mr. T. C. Dunn was served with process or not, but he did not appear in the case, which has proceeded against Mrs. Dunn as though he were not a party.

Mrs. Dunn entered her appearance and pleaded the general issue, giving special notice with her plea that at the time of the execution of said note she was a married woman, under the disability of coverture; that the indebtedness for which the note was given did not relate to her sole and separate property, and she received no consideration therefor.

The case was tried before the court without a jury. There is little conflict in the testimony. Plaintiff in the first instance introduced the note in evidence and rested.

Defendant Mrs. Dunn, as a witness in her own behalf, testified that at the time the note was executed she was a married woman, the wife of defendant T. C. Dunn, whose signature appears to the' note as surety; that the note was given for a lighting system bought by Mr. T. C. Dunn, her husband, installed at the home of her mother on a farm 4% miles from Jackson where she and her husband were then living, her husband working the farm on shares for her mother; that her father had owned the farm at the time of his death, nine years previous to the trial, and by will left it to his wife, Mrs. Dunn’s mother, for life, and at her death to Mrs. Dunn and her sister in equal shares if both survived their mother, if not, to the survivor of them, and, if neither of them survived the mother, then to his nearest relative; that she was yet living on the farm with her mother at the time of the trial, her husband having left her soon after the lighting plant was installed; that she did not know where he was, and had instituted divorce proceedings against him; that she signed the note, but the lighting plant was purchased by Mr. Dunn, her husband.

Plaintiff then showed that he purchased the note for value before maturity in good faith, and was a holder in due course; also introduced the depositions of one LeClaire, who sold the lighting plant as agent for W. S. Hunter, who installed it and to whom the note was given. This witness testified that the plant was sold to “Mr. Dunn and Mrs. Dunn, too.” When asked who ordered said lighting plant, he replied that he could not say positively.

The sole defense in this case is that of coverture, and the precise question to be determined upon this testimony is whether Mrs. Dunn gave this note for a consideration received by her under a contract relating to her sole and separate property.

Not having denied the execution of the note under oath, and having admitted it upon the stand, she is •held to have executed the same in manner and form as alleged and shown by the instrument, she as principal and her husband as surety.

The fact that Mr. Dunn signed this note as “surety,” under the signature of his wife, and presumably after she had signed, may be regarded as of significance in determining her relation to, and participation in, the purchase made when the note was given. In her testimony she refrains from giving any enlightening details of the transaction. In bare outline she only states:

“The-note was given for a lighting system installed in my mother’s home. * * * I signed the note, but he is the one that purchased the plant.”

The facts by which she arrives at that conclusion are not disclosed. She is silent as to the occasion of this purchase, on whose initiative, who conducted the negotiations, what .was said or what was done by her or any one else, except as above stated. The agent testified that it was purchased by both of them — also a conclusion, without the facts upon which it was based. Assuming both have the facts in mind and are equally honest, they apparently reach different legal conclusions.

That she did participate in this transaction in some capacity is shown by the note she signed as principal. Her husband signed the note as surety, which in no way qualified his liability, it is true, and was of no importance to the payee. The note is in the singular number, and the added word “surety” does not change the character of the note as joint and several, with both signers principals, but, as between the signers, it is some indication of the relation they bore to each other. She is presumed to know, and manifestly did know, what she signed. She makes no claim to the contrary, or that she was misled or deceived. Her husband signed the note with her, presumably with her knowledge, as a “surety.”

“A surety is one who at the request of another, and for the purpose of securing to him a benefit, becomes responsible for the performance by the latter of some act in favor of a third person, or hypothecates property as security therefor.” Black’s Law Dictionary.

If the note was given for a debt of her husband, it would of course be void as to her, no matter in what capacity he or she signed it or what the understanding between them was, but if it was given in consideration for a lighting plant, purchased either by her or by her husband for her, acting as her agent, to be installed as a fixture on realty belonging to her, in whole or in part, her separate estate in which the husband had no interest, she is not protected by the disability of coverture. Those questions are well settled in this State, and we need only refer to section 8690, 3 Comp. Laws, and authorities there cited.

The trial court found and held:

“That she did not contract for or purchase this lighting plant; that it was not delivered or annexed to the freehold at her request or in reliance upon any promise or representation made by her; that she was not undertaking to add to or benefit any sole or separate property of her own; and that in executing this note she was, in fact, undertaking to pay a liability contracted and incurred by her husband, and that she is not legally responsible for its payment, and as to her judgment must be rendered in her favor. * * * ”

These conclusions were necessarily reached from her two brief statements, before quoted, that the note was for a lighting plant bought by her husband and installed in her mother’s home, without any explanation of how she came to sign the note, or the circumstances of her participation, negative or positive, in the transaction. Her testimony could all be true and the purchase might have been made by her husband at her request, for her and as her agent, upon her selection of the property, which might have been delivered and installed in reliance upon promises and representations made by her. We think, under the scant facts shown, her unexplained execution of this note at the time of the purchase, signed by her husband as surety only, raises a presumption that, conceding he made the purchase, it was for her and authorized or ratified by her, the plant being confessedly purchased for and installed as a fixture upon realty in which she had a title interest, separate and apart from her husband.

It is contended in her defense that her contingent remainder interest in one-half of this farm can in no way affect the question; that she was only on the farm as the wife of a tenant, with no other immediate rights, her title interest being remote and contingent upon her surviving her mother, who had full possession, control, use, and enjoyment of the same to the exclusion of all others so long as she might live. That she had a vested fee title to a half interest in this farm, subject to a life estate, with a possibility of its being defeated by her death before that of her mother, is clear. The law of Michigan favors vested estates where such construction is possible, and such is the proper construction here. Section 8795, 3 Comp. Laws (4 How. Stat. [2d Ed.] § 10635); Toms v. Williams, 41 Mich. 552 (2 N. W. 814); Eberts v. Eberts, 42 Mich. 404 (4 N. W. 172); Rood v. Hovey, 50 Mich. 395 (15 N. W. 525); Union Mutual Ass’n v. Montgomery, 70 Mich. 587 (38 N. W. 588, 14 Am. St. Rep. 519); Van Gallow v. Brandt, 168 Mich. 642 (134 N. W. 1018). Her title in this farm constituted a separate estate in relation to which she could contract as a femme sole. While it is true her immediate legal status and right on the place at the time this plant was installed were only that of the wife of a tenant working the farm on shares, she was, in fact, living in the home of her childhood with her own mother on the old farm of her dead father, in which she owned a half interest with her sister, subject to her mother’s life interest. Though her husband left her and the place shortly after this transaction, she, at least up to the time of the trial, continued to make her home there, presumably in the use and enjoyment of this gas plant. As between the'two, strong reasons are shown, sentimental and otherwise, why she should desire to and did purchase this improvement and have it installed in the family home, in which she was financially interested, and there is little, if anything, to indicate why he should purchase it for himself and make it a fixture on property in which he had no interest beyond working the place on shares, by an apparently feeble tenure.

We think a necessary conclusion is to be drawn from the undisputed evidence in this case, considered as a whole in all its aspects, that the gas plant for which the note was given was purchased by or for Mrs. Dunn, to be installed as a fixture annexed to a freehold in which she was, and her husband was not, interested; that in giving this note she contracted and dealt in relation to her own separate estate, and thus received a consideration therefor.

The judgment in her favor is reversed, and a new trial granted.

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


text:
    RECK v. WHITTLESBERGER.
    1. Master and Servant — -'Workmen’s Compensation Act — Industrial Accident Board — Evidence.
    Findings of fact handed down by the industrial accident board, on hearings pursuant to statute, are conclusive, in the absence of fraud, if any competent, legal evidence is produced to sustain the facts so found. Act No. 10, Extra Session 1912 (2 How. Stat. [2d Ed.] § 3939 et seq.).

      2. Same — Hearsay—Estates oe Decedents.
    Although statements made by an injured employee relating to his feelings, mental or physical, are admissible in evidence in proceedings under the compensation act, statements made as to the cause of the accident or source of injury are not admissible. But it is not required by the statute that the decision of the board must in all cases be reversed because error may have been committed in the admission of incompetent testimony, when there appears in the record a legal basis for its findings..

      3. Same — Report oe Accident.
    An employer’s official report of an accident, filed with the industrial accident hoard, as required by law, where the employer had ample opportunity to satisfy himself of the facts, and all sources of information were at his command when he made the report, may he taken as prima facie 'evidence that an accident occurred in the manner set |/orth, which fact the evidence did not tend to controvert.
    Certiorari to the Industrial Accident Board.
    Submitted April 30, 1914.
    (Docket No. 45.)
    Decided July 24, 1914.
    Application to the Industrial Accident Board for an award of compensation against Frank B. Whittlesberger for the death of Rudolph Reck. A judgment for the applicant is reviewed by said Whittlesberger on writ of certiorari.
    Affirmed.

      Bowen, Douglas, Eaman & Barbour, for appellant.

      John Dohrman, for appellee.
   Steere, J.

This case is before us upon a writ of certiorari to review a decision or determination of the industrial accident board of Michigan affirming an award of $2,250 made by a committee of arbitration against Frank B. Whittlesberger, the appellant, in favor of the widow of Rudolph Reck, whose death is charged to have resulted from an injury sustained while in appellant’s employ. The proceedings were instituted and conducted under and by virtue of Act No. 10, Pub. Acts 1912 (Extra Session).

Pursuant to section 11 of said act the industrial accident board reviewed the decision of said committee of arbitration and such records as were kept by it, including the testimony it had taken. The return to this writ states, with some slight corrections which are made, that all the material testimony is correctly and sufficiently set forth, in appellant’s petition for a consideration of the questions raised.

The record discloses that on January 12, 1913, said Rudoiph Reck, a baker by trade, died at a hospital in Detroit of septic pneumonia, which resulted, as his physician -testified, from systemic sepsis developed from an infected wound in his hand, claimed to have been caused, on December 26, 1912, by a nail in some fuel with which he was firing an oven in appellant’s bakery on Randolph street, in said city, where deceased was'then employed.

The bakeshop or room in which deceased was working at the time it is alleged he sustained the initial injury was about 100 feet long and 40 feet wide, and on that day two other bakers were at work in the room with him, a boy also being with them in the afternoon. Deceased finished his work for the day as usual, and left at the regular quitting time, which was about 7:30 p. m. His daughter testified" that he arrived home that evening a little later than his customary time, and showed her an injury where he had hurt his hand at or near the thumb, stating that he chopped up a box and “ran a nail in his thumb.” He worked full time at the shop the next day and until 4 p. m. the succeeding day. During this time the men with whom he worked saw and heard nothing of any accident; neither did they observe anything unusual in his work or conduct. He did not, however, return to work after December 28th, the day on which he quit at 4 o’clock.

Dr. Smith, the only medical witness who testified, first treated deceased on January 2, 1913. At that time his employer and fellow bakers were first informed of the claim that he had sustained any injury while at his work. Dr. Smith testified, as before stated, that septic trouble originating with the wound in the. hand spread generally throughout the system and resulted in pneumonia, which ended fatally. This is not controverted, but it is urged that no competent evidence was produced showing where or how deceased injured his hand, or that the injury arose out of and in the course of his employment.

Following a claim regularly made for compensation by the widow under said Act No. 10, generally known as the workmen’s compensation act, a committee of arbitration was selected, as provided by the act, and hearings were held. One of said hearings was at the bakery where the injury was claimed to have been received. None of the -employees saw the accident or were shown to have personal knowledge of when or how it occurred. The committee then threw the door wide open for hearsay evidence, and, against objection, entertained any testimony offered as to what witnesses had heard deceased and others say about it.

Appellant’s assignments of error are as follows:

“First. In holding that there was sufficient proof that Rudolph Reck received a personal injury arising out of and in the course of his employment to justify a decree in favor of the claimant.

“Second. In holding that hearsay evidence offered for the purpose of proving that the deceased received a personal injury arising out of and in the course of his employment was admissible, and denying the objection of your petitioner to its admission.

“Third. In determining and ordering your petitioner to pay the said widow the sum of $2,250, and costs, as compensation for the injury and attendant death of Rudolph Reck.”

The third assignment is manifestly contingent on the other two, and calls for no separate consideration. The first and second present the two questions of whether this unrestricted admission of hearsay testimony was reversible error, and whether there was any competent evidence in the case on which to base a finding that the injury complained of arose out of, and in the course of, deceased’s employment.

At the threshold of this inquiry we are confronted with the proposition that the board is made by the law creating it the final tribunal as to the facts, and, it having made a finding of facts legally sufficient to support the award, its decision cannot be questioned by the court.

Section 12 of part 3 of said act provides:

“The findings of fact made by said industrial accident board acting within its powers, shall, in the absence of fraud, be conclusive, but the Supreme Court shall have power to review questions of law involved in any final decision or determination of said industrial accident board: Provided, that application is made by the aggrieved party within 30 days after such determination by certiorari, mandamus or by any other method permissible under the.rules and practice of said court or the laws of this State, and to make such further orders in respect thereto as justice may require.”

As a legal conclusion, no one will deny that in any judicial proceeding the competency of testimony offered in support of or against any material fact is a question of law. It does not follow, however, that the appellate court in all instances must set aside an adjudication because of erroneous admission or rejection of evidence. The doctrine that prejudice is always presumed from error is not accepted by all students of jurisprudence with complacency, even in those jurisdictions where the doctrine prevails. Neither do we conceive that in reviewing decisions of this board all technical rules of law, often made imperative by precedent in reviewing the action of regularly constituted trial courts, must be applied. The board is purely a creature of statute, endowed with varied and mixed functions. Primarily it is an administrative body, created by the act to carry its provisions into effect. Supplemental to this, in order that it may more efficiently administer the law, it is vested with quasi judicial powers, plenary within the limits fixed by the statute. Along the lines marked out by the act it is authorized to pass upon disagreements between employers and claimants in regard to compensation for injuries, and to that end make and adopt rules for a simple and reasonably summary procedure. Hearings are to be held upon notice to parties in interest; compulsory process for attendance of witnesses and power to administer oaths is given; the parties in interest are entitled to notice, to be heard and to submit evidence; a review, findings, a decision, and an award of compensation are provided for, though in the final test resort must be had to the courts to enforce the awards. In those proceedings the board does not act solely as a mere arbitrator. It has various plenary powers well defined, and its status is unique in the particular that it performs in combination both administrative functions and certain of the duties of a court, a referee, and an arbitration board. Its findings of facts upon hearings are conclusive, and cannot be reviewed, except for fraud, provided, necessarily, that any competent, legal evidence is produced from which such facts may be found. Facts cannot be evolved! from the inner consciousness of that tribunal on bare supposition, guess, or conjecture, nor on rumor or incompetent evidence. To so determine the rights of parties would be to act outside the authority conferred by the act, and without jurisdiction.

While it was evidently the intent of this law that, by concise and plain summary proceedings, controversies arising under the act should be promptly adjusted, under a simplified procedure unhampered by the more technical forms and intervening steps which sometimes cumber and delay regular litigation, yet the language of the act, and provision for review of questions of law, indicate clearly an intent that the elementary and fundamental principles of a judicial inquiry should be observed, and that it was not the intent to throw aside all safeguards by. which such, investigations are recognized as best protected. /

The rule against hearsay evidence is more than a mere artificial technicality of law. It is founded on) the experience, common knowledge, and common conduct of mankind. Its principles are generally understood and acted upon in any important business transaction or serious affair in life. In such matters men refuse to reply on rumor or what some one has heard others say, and demand the information at first hand. The common, instinctive weight usually given such evidence is illustrated by this statement of Dr. Smith, after relating what deceased told him as to how he hurt his hand, “I don’t know anything about itand of Mrs. Taylor, a daughter of deceased, who, in connection with her testimony as to what she had been told, said, “I really don’t know myself; * * * the only thing I know about this matter is that the night I went home they took him to the hospital.” The danger and unreliability of hearsay testimony is well exemplified in her evidence. She testified that Haberstoh, a fellow workman in the shop, saw the accident and described it to her, as she related it while testifying.. This, on the surface, would seem to be about as satisfactory and convincing hearsay evidence as could be produced. Had Haberstoh been unavailable, it would have been equally competent and uncontrovertible, but it was shown by Haberstoh himself that he saw nothing of any accident, and obtained his information from Charles Ruskei, the boy who worked in the shop afternoons, who himself saw nothing, but heard deceased state how he hurt his hand.

Coming directly to this line of testimony as applied to workmen’s compensation cases, it is said in Boyd on Workmen’s Compensation, p. 1128:

“The statements made by an injured man as to his bodily or mental feelings are admissible, but those made as to the cause of his illness are not to be received in evidence. The rule applies to statements made by a deceased workman to a fellow workman as to the cause of his injury.”

And more fully in Bradbury on Workmen’s Compensation, p. 403, as follows:

“The statement made by an employee in the absence of his employer, by a deceased man, as to his bodily or mental feelings are admissible in evidence, but those made as to the cause of his illness are not admissible in evidence and where there is no other evidence of an accident arising out of and in the course of the employment than statements made by- a deceased employee in the absence of his employer, an award cannot be sustained.”

In Gilbey v. Railway Co., 3 B. W. C. C. 135, where a workman at a meat market on arriving home told his wife that he had broken his rib when trying to save some meat from slipping into the dirt, the court said:

“To hold such statements ought to be admitted as evidence of the origin of the facts deposed is, I think, impossible. Such a contention is contrary to all authority.”

This rule is emphasized to the extent of even holding admission of such evidence reversible error in Smith v. Hardman & Holden, Ltd., 6 B. W. C. C. 719, because the mind of the trial court might have been “colored by his admitting statements which are inadmissible as evidence.”

We do not think, however, that under the language used in our workmen’s compensation act the decisions of its administrative board must be in all cases reversed under the rule of presumptive prejudice, because of error in the admission of incompetent testimony, when, in the absence of fraud, there appears in the record a legal basis for its findings, which are made “conclusive” by statute when said board acts within the scope of its authority.

As a part of the plan for a practical administration of this law, section 17 of part 3 requires each employer who elects to come under the provisions of said act to keep a record of injuries “received by his employees in the course of their employment,” and within ten days after an accident resulting in personal injury to report the same in writing to the industrial accident board, on blanks printed for that purpose.

The first knowledge which Came to the board of this accident is contained in the report of appellant, made by an admitted agent. It is dated January 9, 1913, and marked “First Report of Accident.” It states, amongst other things, that on December 26, 1912, Reck, a baker by trade, was injured; the “cause and manner of accident” being that he “was throwing wood in furnace and a nail run in left hand inflicting a deep gash.” This report was made three days before Reek’s death, and indicates that the employer, or his representatives, had full notice of the injury, with ample opportunity to investigate while Reck was alive, and all sources of information were both fresh and available. A second report, after Reek’s death, made on January 15, 1913, giving the same date of the accident, etc., states of its “cause and manner:”

“The injured was throwing wood in the fire and a nail scratched his left hand. He worked for two or three days after the accident, when the hand became infected, and he was sent to the hospital. After the: hand had started to heal nicely he contracted broncho-pneumonia, which disease caused his death January 13, 1913.”

We think that such reports from the employer, where all sources of information are at his command when the reports are made, and he has had ample opportunity to satisfy himself of the facts, can properly be taken as an admission, and, at least, as prima facie evidence that such accident and injury occurred as reported.

No evidence was offered to impeach the reports or to show that the accident occurred otherwise than as stated in them. Eliminating from consideration the hearsay testimony erroneously admitted, which could not affect either way the legal significance of such reports, the record furnishes legal support for the findings of fact made. Consequently such findings are to be recognized as conclusive under the statute.

The decision of said industrial accident board is therefore affirmed.

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

      (2 How. Stat. [2d Ed.] § 3939 et seq.).


text:
    JONES v. BERKEY.
    1. Vendor and Purchaser — Breach of Contract — Land Contract —Time.
    Under a contract for the sale of land made by defendants, who had only a contract interest in the premises under a prior land contract, and accordingly provided for payments to be made by the vendee at the times when installments fell due upon the first contract, stipulating, moreover, that time should be of the very essence of the agreement, and that in the event of plaintiff’s default, defendant could sell the property without incurring a liability for breach, defendant was entitled, after default and resale to a third person, to have a sufficient sum tendered to include necessary costs and expenses arising from the undisputed default; to offer merely the payment provided for by tbe terms of tbe agreement was insufficient as foundation for an action for damages.
    2. Same — Time as of Essence — Contracts.
    While, as a general rule, time is not of the essence of a contract to pay money, though the time for payment be fixed, and a declaration of such intention is not conclusive, yet, where the requirement is reasonable, and the circumstances give occasion for it, the parties may properly stipulate that the provisions relative to the time of installments to be paid upon a land contract shall be of the essence.
    3. Same — Payment—Tender.
    A party seeking relief against a forfeiture should tender sufficient to make the other party whole.
    4. Same — Breach of Contract.
    He who commits the first substantial breach Of a contract cannot maintain an action against the other contracting party for failure to perform.
    Error to Kent; Brown, J.
    Submitted April 22, 1914.
    (Docket No. 109.)
    Decided July 24, 1914
    Assumpsit in justice’s court by Henry W. Jones and Daisy M. Jones against Charles H. Berkey for damages for breach of a contract for the sale of lands. From a judgment for defendant, plaintiffs appealed to the circuit court. Judgment for plaintiffs. Defendant brings error.
    Reversed; new trial denied.

      Taggart & Taggart, for appellant.

      Fred P. Geib and William J. Landman, for appellees.
   Steere, J.

In this action plaintiffs recovered a verdict and judgment for $250 against defendant, in the Kent county circuit court, as damages for an alleged failure to convey to plaintiffs a certain 40 acres of land located near the city of Grand Rapids, in conformity with the provisions of a contract of purchase and sale entered into between the parties on May 10, 1911. The agreement claimed to have been breached by defendant was the usual form of land contract, naming defendant as vendor and plaintiffs as vendees, parties of the first part and second part, respectively, describing the property, and stating the consideration to be $2,200, to be paid as follows: $679.38 on or before September 15, 1912; $380.67 on or before September 15, 1913, and the balance of $1,140 by assuming or paying a mortgage for that amount on said property “together with interest on the whole sum that shall be from time to time unpaid, at the rate of six per cent, per annum, to be computed from March 15, 1911, and to be paid semi-annually.” Possession was given to the plaintiffs, who were required to keep all buildings on the premises in good repair and insured, and pay all taxes assessed against the property; defendant agreeing to give a good and sufficient warranty deed upon payment and performance of all conditions by plaintiffs. In case of default all payments made were to be forfeited as stipulated damages. The contract further provided that defendant at his option could, in case of default in any payment, declare all sums unpaid immediately due, and remove plaintiffs from said premises in the same manner as is provided by law for the removal of a tenant who holds over premises contrary to the terms of his lease. The concluding provisions are as follows:

_ “And it shall be lawful for the first party at any time after such default to sell and convey said premises, or any part thereof, to any other person, without becoming liable to refund any part of the money received on this contract, or for any damages on account of such sale. And it is hereby expressly understood and agreed that time shall be deemed as of the very essence of this contract, and that unless the same shall in all respects be complied with by second party at the respective times and in the manners above limited and specified second party shall lose and be debarred from all rights, remedies and actions both at law and in equity upon or under this contract.”

On January 11, 1913, defendant served written notice of forfeiture of said contract, and demanded immediate possession of the premises by reason of plaintiffs having failed to make the first payment of $679.33, due September 15, 1912,. as well as the interest which had fallen due upon said contract and taxes assessed against said property. On the trial it was shown that at the time said contract was entered into defendant held the property under a land contract from one Boos, and the payments to be made on this contract were timed to correspond with and meet those defendant was required to make on his contract with Boos. Plaintiffs took possession of the property under their contract and paid interest to September, 1911, part of it to defendant and part to Boos, one' insurance premium, and interest due March, 1912. They paid no taxes, and defaulted in subsequent interest - and payment due September 15, 1912, which was followed by defendant defaulting in the payments due- Boos on his contract. Boos thereupon instituted proceedings against defendant and plaintiffs to forfeit his contract with defendant and recover possession of the property from plaintiffs, who held under defendant. These proceedings were continued from time to time, apparently according to an understanding between all parties in interest, and to give delinquents an opportunity to meet defaults, when finally defendant, unable as he states to otherwise obtain money to protect his contract, entered into an arrangement with one Connell to pay up what was due on defendant’s contract to Boos and take a deed of the property, with an agreement to subsequently sell or allow it to be sold, if possible, for defendant’s and plaintiffs’ benefit, he to be reimbursed what he had paid Boos and $250, if he made the sale, or $150 if made by others, and what expenses he had incurred in the matter. On November 8, 1912, Connell paid Roos up, and obtained a deed of the property, subject to any interest which Berkey might have under his land contract. Plaintiffs denied any definite knowledge of or participation in this arrangement. Connell subsequently took possession of the property, finding it vacant as he claimed, but during plaintiffs’ temporary absence as they claim. Shortly after Connell 'had paid up Roos and secured a deed of the property, negotiations were had between the parties relative to an adjustment, in which matters progressed to a point where the only difference between them was $161.61, which defendant claimed as a part of the expenses which he had been obliged to incur in saving the property through Connell, owing to plaintiffs’ default in their payments. Plaintiffs refused to pay this, and insisted they were entitled to a clear deed from Berkey on payment of the balance due according to the terms of the contract. The matter of a tender of that amount, the computation of which was not in dispute, was proposed by a .real estate agent named Sproat, who was then assisting plaintiffs in the matter and endeavoring to dispose of the property for them, and to whom they gave a power of attorney. Following the intimation that a tender would be made, defendant wrote a letter to Sproat, stating his position, and disposition to yet accept the amount specified in the contract with the actual costs and expenses which he had been obliged, owing to plaintiffs’ default, to incur in the proceedings brought by Roos against plaintiffs and himself, including the amount he was compelled to pay Roos to settle the matter and obtain an extension of time, amounting in all to $161.61, concluding as follows:

“If you or Mr. Jones claim that I am not entitled to reimbursement for such costs, and that Mr. Jones’ rights under the contract has not expired by reason of the notice heretofore served, and you see fit to tender me the amount you and he claim due upon the contract, I will at, such time consider whether to accept or refuse such tender, hereby expressly reserving my decision until tender be made. This is in no way to be construed as a waiver of my claim that the contract with Jones is terminated, or waiver of the notice heretofore served upon Mr. Jones in my behalf or that of Mr. Roos or Mr. Roos’ assignee.”

Later Sproat informed defendant over a telephone that he would not go to the trouble,- annoyance, and expense of maturing arrangements to raise and tender the money due on the contract unless it would be accepted. Sproat testified that defendant answered that he would refuse to accept the tender unless the claimed expenses were included. Defendant admitted that he then declined to agree to accept a tender of the amount proposed, stating:

“And in answer to that I says we will settle the matter according to the written statement which was served.”

Plaintiffs claimed and introduced testimony tending to show that the property was worth $3,000, a disputed question of fact, defendant showing that subsequent efforts to dispose of it resulted in a sale by Connell for $2,600, of which defendant received $307.94, being the balance remaining after payment of a mortgage owing on the property, and other charges, including Connell’s commission and expenses in the matter.

Upon the question of tender, the court instructed the jury that defendant, by the admitted facts in the case, had waived his right to require a legal tender of the balance due from plaintiffs to him, and further charged the jury there were just, two questions for them to consider: First, whether plaintiffs made a “demand upon defendant in good faith for a deed,” offering to pay him the full amount then due upon the contract, and had “in good faith made provision and arrangement to have on hand, and produce the necessary money with which to pay the balance due on the contract;” that if the jury found “such demand upon defendant for a deed and proposal by plaintiffs to pay the balance due on the contract was in good faith made by plaintiffs, plaintiffs were then entitled to an offer of a deed by defendant as proposed in the contract, and to which plaintiffs would then be entitled upon the payment of the amount due under the contract;” and, second, if they found in favor of plaintiffs upon the first question, then how much, if any, damages they sustained, upon the measure of which instructions were given.

We do not regard it necessary in the disposition of this case to reach the assignments of error relative to admission or rejection of testimony or the charge of the court upon the subjects of tender and good faith. No tender was made, waived, or proposed of an amount beyond that computed by the terms of the contract which plaintiffs had breached. Under the undisputed evidence in this case no tender was sufficient which did not include the actual and necessary costs and expenses arising out of the legal proceeding brought by Roos, and which resulted from plaintiffs’ default. It is true, as claimed, that they had no contract relations with Roos, but their contract with defendant was made with reference to his contract with Roos, as they were fully advised. Payments were timed to meet payments, time made of the essence of the contract with that in view, and it was expressly agreed that in case of default by plaintiffs defendant could otherwise dispose of the property without incurring any liability under their contract, and plaintiffs be thereafter debarred from all rights, remedies, and actions under the same. These plain and unambiguous provisions were embodied in the contract for a manifest reason, under circumstances indicating that the contracting parties recognized and regarded them as essential. While as a general rule time is not of the essence of a contract to pay money though the time of payment be fixed, and is not necessarily made such by even so declaring it, yet where circumstances give occasion for it and the stipulation is reasonable, the contracting parties may, by clear terms, stipulate to make it so. Richmond v. Robinson, 12 Mich. 193.

“If time is of the essence, a performance after the time fixed does not bind the other party unless he waives the breach, and thereby, in effect, makes a new contract taking the place of the old one.” Clarke on Contracts [2d Ed.], § 233.

While during an interval subsequent to plaintiffs’ default conversations were often had involving demands for payment and negotiations for an adjustment, defendant consistently refused to recognize the contract defaulted as in force according to its strict terms, but, willing, and apparently anxious, to reach an agreement in the spirit of their original dealing, he repeatedly proposed a consummation of the matter agreeable to the terms of the old contract, but always with the modification that the additional expense plaintiffs’ default had caused be added to the price, in effect making a new contract, “taking the place of the old one.”

It is urged that the additional expense was incident to the Roos-Berkey contract; that there were no contract relations between plaintiffs and Roos, or Connell, and plaintiffs are not concerned with expenses defendant incurred with the latter by reason of his default. This entirely overlooks the relations of both contracts to the same property and the strict provisions of plaintiffs’ contract as to time and terms of payment, understanding^ made under known conditions, to correspond in date and amount with the other. Those necessary expenses in relation to this property were manifestly suffered by defendant by reason of plaintiffs’ default.

“Nothing short of an offer of everything that the creditor is entitled to receive is sufficient, and a debtor must at his peril tender the entire sum due, including all necessary expenses incurred or damages suffered by the creditor by reason of the default of the debtor.” 38 Cyc. p. 137.

A party seeking relief against a forfeiture should tender sufficient to make the other party whole. Stickney v. Parmenter, 35 Mich. 237.

The general rule is well stated by Judge Sanborn in National Surety Co. v. Long, 125 Fed. 887, 60 C. C. A. 623, citing many authorities:

“He who commits the first substantial breach of a contract cannot maintain an action against the other contracting party for a subsequent failure on his part to perform.”

In the instant case it is undisputed that plaintiffs first committed a substantial breach of the contract sued upon, recognized by the contracting parties in express terms as of such importance that, if committed, the opposite party should be free to .at once sell the property contracted for without liability for damages, and plaintiffs be debarred from all remedies and actions. Following such breach, the only thing of legal significance claimed to have been done to heal it is a doubtful waiver of tender over a telephone in answer to an inquiry of plaintiffs’ agent if defendant would accept the amount computed due by the strict terms of the contract, irrespective of any costs or damages resulting to defendant by reason of such breach. Following this plaintiffs rested on their claimed rights so established, and did nothing further towards performance.

We conclude, for the reasons stated, that under the undisputed facts shown plaintiffs are precluded by the terms of this contract, which they first breached, from maintaining this action, and a verdict should have been directed in favor of defendant.

The judgment is reversed, and no new trial granted.

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