author: Cooley Ch. J. Campbell J.

text:
    William Hobart v. The City of Detroit.

      City Charter: Contract: Lowest bidder: Patented article. The fact that an article is patented does not necessarily prevent any person but the patentee from contracting to supply it; others may do so, taking the risk of being able to obtain the patentee’s license.
    Therefore, where a city charter provides that no contracts shall be made by the city, except with the lowest bidder, after advertisement of proposals, it does not prevent the city from contracting for a patented article, such as the Nicholson Pavement, although, m point of fact, the only bidder was the patentee, who held a monopoly of the article.

      Heard My 8th.

      Decided July 13th.
    Appeal iu Chancery from Wayne Circuit.
    The bill in this case was filed against the City of Detroit, E. N. Lacroix, its special collector, and Smith, Cook & Co., a firm of paving contractors, to enjoin the collection of a paving tax upon the premises of complainant, situate on Woodbridge street, in the City of Detroit, assessed in 18G7, to defray the cost of paving in front of said lot with the “Nicholson Pavement,” so called. ■

      Tbe bill charges that the “Nicholson Pavement” is a patented method of paving, and that Smith, Cook & Co. are the exclusive owners of the patent right for the city of Detroit, and that no one else can lawfully construct said pavement in said city; that in bidding for the contract to do said paving, there could be no lawful competition under the city charter, and that, in fact, they were the only bidders for the contract; and that, on such a bid, the contract was let to them, and the tax assessed to pay for the contract so made.
    The complainant insists that, under the charter of the city, it is not lawful to make any contract with a party for work, etc., for which the party holds an exclusive patent, and with whom there is and can be no lawful competition.
    The defendants demurred to the bill. The demurrer was sustained, and the bill dismissed.

      Levi L. Barbour, and Moore & Griffin, for complainant.
    1. Municipal corporations possess only such powers as are expressly granted to them.— 22 Conn. 552; 12 Ill. 1; 1 Duer, 452; 14 Ia. 494; 1 Kansas, 432.

    The power to grade and pave streets and charge adjacent land owners, is derived from the charter, and that power must be exercised in accordance with its provisions.
    Acts authorized by charter must be done in the manner prescribed by that instrument; especially must the power be strictly pursued where such acts affect private property.— 8 Ind. 34; 2 Bos. 173; 7 Id. 601; 23 Barb. 349; 4 Sandf. 221; 18 Wis. 92; 2 Kansas, 357.

    2. The general power to grade and pave streets is granted to the Common Council of the City of Detroit. Laws 1857, p. 96.

    But this general power is limited and restricted, aud the manner indicated in which it shall be exercised. — Laws 1857, p. 134.

      Before the adjacent land owners are liable, the contract . must be let, or entered into, to and with the lowest bidder.
    The simple question submitted by the bill and demurrer is: Was this contract let, or entered into, tó and with the lowest bidder, within the meaning of the provisions of the charter ?
    The legislature had some object in requiring contracts^ to be entered into with the lowest bidder, some of which may be enumerated, as follows:

      a. For the purpose of inviting''competition, and thereby ensuring to the public the performance of the work at a reasonable price.

      b. For the purpose .of ensuring against any collusive agreement between the corporation or its officers and the contractor, whereby the public might be defrauded.

      c. For the purpose of affording all possessed of the requisite skill, a fair opportunity of competing for the construction of public works; to encourage the exercise of such skill, and to guard against partiality to individuals.
    Surely a contract in which none of the objects which the legislature had in view is attained, but all are defeated, can not be said to be within the meaning of this provision of the charter.
    It seems absurd to designate a bid as the lowest bid, when there could be no other bid within the range of legal, possibility.
    The phrase “lowest bidder” imports that there may be a higher bidder.
    The authorities on this question, though somewhat meagre, are directly in point, and quite uniform.
    The contract must be let in such a manner that this court, with all the facts before them, can determine who was the lowest bidder; if not, it is void. — 2 Bos. 173; 20 N. Y. 312.

      A fortiori it is void, if this court must determine that there could be only one bid, and could not possibly be any other bid to compete with it.— 13 Barb. 573; 17 N. Y. 584; 33 Id. 309.

    The exact point raised in this cause has lately been before the Supreme Court of Wisconsin— Dean v. Charlton— and it was decided that the collection of the assessment could not be enforced against adjacent land owners.
    It is undoubtedly true that 'this view of the case may work a hardship to the contractor; but the contractor is bound to know the provisions of the charter, and had actual knowlege that at the time of the advertisement for bids and his offer, there was no bidder that could lawfully compete with him for the laying and constructing of the Nicholson Pavement.

      G. V. M. Lothrop, and Gray and Moran, for defendants.
    1. By the Charter of Detroit the most ample authority is conferred upon its Council to grade and pave the streets, and to provide for paying the cost thereof by assessment on the adjacent lots. — Laws 1857, p. 96, sub. 11.

    This gives the power. Another part of the charter provides the mode of exercising this power, with .many other powers, where the expense involved exceeds $200.
    It is provided that proposals for bids, with specifications, must be advertised for, and the contract shall be made only with the lowest responsible bidder. — Laws 1857, p. 134, Chap. 8, § 12.

    It is not required that the Council must accept the lowest responsible bid; only that no contract shall be let except to the lowest responsible bidder. The Council can, if no bid is reasonable, reject them all, and decline to enter into a contract at all.
    This, then, as it seems to us, is the correct statement of the case.
    The city is clothed with full power to grade and pave its streets, but it is required to conform to a certain mode in its exercise. This, indeed, operates as a limitation upon the exercise of the power. But if the Council proceeds in the prescribed way, it may use the whole power with which it is clothed. The limitation is not upon the power, but only on the exercise of it.
    The legislature prescribes such mode of exercise as it thinks best. And if the mode prescribed is followed, the city is under no limitation or restraint in the extent of the power.
    The City Council under the charter is not a mere private agent. It is a public body, clothed with large powers, involving discretion and responsibility. When clothed with a power, all the 'methods of its exercise, as well as the option of its exercise or not, are in a great measure left to its own wise discretion. Where a rule or mode of exercise is prescribed, then, of course, it must be followed. But, beyond this, modes, occasions and extent of exercise are left to the wise judgment and discretion of the Council.
    The Grimshaw patent paving costs only half as much as other methods. But it is a patent. Can not we use it? An improved patent steam fire engine may be a great advantage. Can we not buy one, because only one man can build and sell them? The patent electric fire alarm saves much expense to the fire department, and many thousand dollars of property. But it is a patent. Has the Legislature so tied our hands that we can’t buy it? Such illustrations can be indefinitely multiplied. Nor are they ideal cases.
    So as to another class of cases. One man may have the only gravel pit or stone quarry, or the only available one. There can be in such case no real competition. Could no stone or gravel be acquired in such case?
    Yet we must so hold, if the power exists only where the case admits of actual competition.
    It seems to us, with all submission, that the position is wholly untenable.

      The power is given. It is given to a deliberative, responsible public body. One general rule is prescribed relative to its exercise. This is prescribed, not as a limitation of the power, but only as a rule of exercise, likely to produce salutary results in most, if not in all, cases. If in some cases it produces less, or even no beneficial results, it does not affect the power of the Council. The Council obeys the legislature so far as it has spoken. Beyond this it is made responsible to those with whose interests it deals, and who, in this as in other matters of public concern, can call it to account. The power which it exercises is absolutely necessary; it must, from the nature of things, in its administration be left largely in the discretion of the Council, and that discretion can only be revised at the polls.
    In this case there was no abuse of discretion. This kind of pavement has secured a large hold on public favor, and, in fact, it was laid down on this street by the desire of a large majority of the property holders.
    We should then contend that the better rule would be to hold that the provision of the charter in question did not extend to that class of cases where there could be no competition, and that in such cases the Council could exercise its general power without going through the form of advertising, receiving bids, etc.
    This is the conclusion reached by the courts of New York, under the provisions of a charter in some respects resembling that of the City of Detroit.
    The cases in the New York courts are all summed up and considered in a late casei in the Court of Appeals. Harlem Gas Co. v. Mayor, 88 N. Y. 809.

   Cooley Ch. J.

The complainant seeks to enjoin the collection of a tax levied upon a lot owned by him for the purpose of paying the expense of paving in front of it with the Nicholson pavement; alleging, as ground of injunction, that the contract for such pavement was illegal, and therefore invalid.

The question of validity arises upon the folloAving facts: The City Charter, chap. 8, %1%, provides as folloAVs: “No contract for the purchase of any real estate, or for the construction of any public building, seAver, paving, graveling, planking, Macadamizing, or for the construction ' of any public work whatever, or for any work to be done, or for purchasing or furnishing any material, printing or supplies, for said corporation, if the purchase of said real estate, or the expense of such construction, repair, Avork, material or supplies shall exceed $200, shall be let or entered into except to and Avith the loAvest responsible bidder, Avith adequate security, * * * * and not until advertised proposals and specifications therefor shall have been duly published in at least one daily newspaper published in said city, and for such period as the Common Council shall prescribe.”

The right to lay the Nicholson Pavement in Detroit, at the time this contract Avas let, Avas OAvned exclusively by the firm of Smith, Cook & Co., the contractors, who alone, therefore, it is said, could and did bid for the contract, and there being no possibility of a competitor, the contract Avas aAvarded to them on their OAvn terms. This circumstance of exclusive right, it is claimed, precludes the application of this provision of the charter to such a contract, inasmuch as the purpose of the provision, which Avas to se'cure open and public competition, could not possibly be accomplished Avhere there could be but one bidder.

The doctrine of the complainant leads to this conclusion: That Avherever, from the nature of the case, there can be no competition, the city can make no contract, hoAvever important or necessary for the interest of the city; since contracts, except by public letting, are forbidden by the express terms of the statute, and those by public letting are forbidden by an implication Avhich is equally imperative. And if applied to this case, however much this mode of paving may exceed all others in utility, it can not be adopted in the city of Detroit, or in any other city with the like provision in its charter, even although the proprietors of the patent might be willing to lay it on terms more advantageous to the city than those on which pavement of loss value could be procured.

To support this conclusion, we must import into the statute a condition which we must suppose to pervade its spirit, but which is not expressed by its words. The power Avhich the charter gives to the Common Council to cause the streets to be paved, is conferred by another section in very ample terms — the sole condition imposed upon it being the public letting of the contract to the lowest bidder. The courts, I think, should be very cautious about importing new terms into a statute in order to make it express a meaning which its words do not convey, and they ought, at least, to first make sure that they are not changing the legislative intent, and giving the statute an operation that the legislature never designed, and, perhaps, would never have assented to.

The benefits to be anticipated from the public letting of contracts, must vary greatly in the different classes of cases, according to the extent of competition that is possible or can be excited. If unskilled labor is to be advertised for, or a work which is open to all, and all the materials which are abundant .at regular market rates, it is evident that everybody may bid, and the competition be general. But if the work to be constructed require the constant attendance of a scientific overseer, or if some of the materials be scarce, and owned by a few persons only, or if the work be so expensive as to be, according to the terms on which it is to be constructed, beyond the means of most persons, it must be very apparent that in these, and many other cases which can be supposed, the same full benefits of competition are not always to be obtained, which are probable in the cases first supposed, and that the danger of monopolies and combinations will be proportionately greater.

It will not be claimed, however, that the city has not authority to let contracts in these cases; and even if two persons only are in position to become bidders, it would be conceded that a contract could be lawfully let, even though but one of the two should actually throw in proposals. The security of the city against combinations and extravagant contracts in such cases must rest in the power which the Common Council possess to reject any bid which they might regard as unreasonable; a- power which the legislature have evidently considered of some value, as otherwise they would have made the fact of lowest bid conclusive, and the execution of a contract in accordance with it compulsory.

It is very clear, therefore, that the courts can not step in and declare a contract thus publicly let to be void, because the anticipated benefit was not obtained from the competition, if any competition was possible. The statute has fixed a rule from which great benefit will be derived in many cases, and some benefit in most cases; and it has declared, in effect, that contracts shall be valid which comply with that rule. The rule is made general for the benefits that will generally flow from it; and the purpose is to attain those benefits wherever practicable, be they more or less. We cannot declare a, contract void on the sole ground that no benefits followed the application of the rule in that particular case, though the Common Council might have refused to enter into it, for that reason, if they had seen fit. And if we can not declare a contract void because of this result, neither, I think, can we do so because, beforehand, the result might be supposed inevitable.

The case was argued as if such a patent right was a thing which stood by itself, so that very few cases could be liable to the objection now taken. This, however, is not so. The objection would be applicable in any case where the city might have occasion to procure any patented machine, or to let any contract requiring the use of any invention secured by letters patent. It is true that in the case of machines of known utility, the market will generally be supplied at regular rates; but it frequently happens that one person, firm or corporation alone has them for sale, so that there is a practical monopoly, -even though some of the' machines may be in the hands of individuals who have purchased for their own use. Yet unquestionably other persons than the owners of the right may bid for a contract to supply such machines, relying, perhaps, on being able to obtain the privilege of manufacturing them, or upon purchasing them at the rates at which they are generally sold. Their contract would be valid, notwithstanding they might find it difficult or even impossible to perform it.

But it is sometimes the case that there is as complete a monopoly of some material necessary to the performance of a public contract, as of a patent right the use of which is essential. It might even happen with a common material, that at a particular emergency all that was within reach, or that could be obtained within the necessary time for the performance of the contract, would be owned by a single individual. In such a case, on the complainant’s theory, the public work must be suspended, however necessary and urgent. And as a monopoly in regard to any necessary article, however insignificant, would be as fatal as if it extended to all the material, injunction bills of this kind, I fear, would multiply upon us, to the great detriment of the city, since contractors, in making their bids, rvould be compelled to add thereto a sum sufficient to cover the risks of loss from delayed payments and from possible defeat in a suit in chancery.

But it is not, I apprehend, strictly correct to say that because the patented invention which must be made use of is owned by one person exclusively, therefore, no one else can be a bidder. Every one has a right to bid, and to take upon himself the risk of being able to procure the right to make use of the invention. Certainly the showing that Smith, Cook & Co. owned the right to put down the Nicholson pavement in the City of Detroit, does not go far enough to show that they alone could bid on a contract for that purpose. If that firm held the privilege of putting-down the pavement for sale at a regular price per square foot or yard, the opportunity to bid for a public contract would be as much open to public competition as for any other work requiring skilled labor. Eor aught we know this was the case; and we may well take notice of the fact that it is frequently by thus selling the “royalty” that the owners of new inventions expect to obtain their reward. The royalty acquires a sort of market value which becomes well understood; and all persons have the benefit of this market value just as much as they would if the ownership and right to control were of such a character that monopoly would be impossible. True, the owner may at any time withdraw the royalty from sale in order to drive hard bargains; but, if he does, the public still retain a security in the power to refuse to contract with him.

The theory of the complainant is that more than one bid in this case was impossible. But suppose, in point of fact, Smith, Cook & Co. had not bid at all, but several other persons, having first ascertained at what price they could obtain the royalty, had entered into a sharp competition for this contract, would it not have been demonstrated that not only was more than one bid possible, but that -the very benefits the charter designed to secure by the public letting had been obtained? And if this is so, how can it be said that the fact that a monopoly of the patent exists necessarily defeats all contracts to which the patent is essential ?

On the theory of the complainant it is easy to imagine cases in which the court would be placed in the remarkable position of holding contracts void on the ground that competition was impossible, and, therefore, the benefits of the public letting could not be obtained, when in fact there had been competition, and the benefit had actually been realized. I do not believe there is any mere implication of the law which can force us to this conclusion; and, to my mind, it is very clear that the legislature would not intentionally have so tied up the hands of the city authorities as to preclude their making use of new and valuable inventions. I am not, therefore, disposed to put upon the charter a forced construction to that effect, which its terms do not appear to me to justify.

I am aware of the contrary decision which, by a divided court, has been made in Wisconsin in the case of Dean v. Charlton, but with great respect for the reasons assigned by that court, I am still brought to the conclusion that the decree of the Circuit Judge was correct, and it must be affirmed.

Christiancy and Graves JJ. concurred. ' .

Campbell J.

I am unable to reconcile the action of the city with the provisions of its charter. It may be very desirable to allow such a course to be taken, but the prohibition seems to me to be very clear, and if this case can be taken out of it, I do not perceive how, in any case, the citizens can be protected from the very dangers which this clause was intended to prevent.

The charter — Chap. 8, § A2 — declares that no contract for paving (or various other things), if for more than $200, shall be “let or entered into, except to and with the lowest responsible bidder, with adequate security, and not until advertised proposals and specifications therefor shall have been duly published in a daily paper.” The same section prohibits contracts with persons who are in arrears to the city, as well as some others, and forbids contracts requiring mechanical skill to be let to other persons than mechanics.

It can not be claimed that if the monopoly of the pavement in question belonged to a public defaulter, or to one who was not a practical mechanic, any ground of dispensation could be found. Yet the necessity for opening the door would be as great in that case as in any other, if the city needs the improvement. But it has not been deemed safe to allow a full and free choice and we have no power to remit any legislative requirement.

The clause in question can not usually create more difficulty where articles or processes are patented, than in other cases. The patent laws contemplate that things patented shall be offered to the public on equal terms, and so generally is this done that the rule of damages for infringement is governed by the price usually charged. And in most cases, therefore, improvements requiring the introduction of patented articles or methods, are as open to general competition as any others. But if a rigid monopoly is kept up, there can be no competition, and all the evils contemplated by the act are introduced. Instead of obtaining the work at the lowest price, it can only be had at the highest. price, which is supposed to fall short of prohibition. Instead of competing skillful workmen, those must be employed whom the patentees see fit to force upon the corporation.

Instead of choice in the quality of materials, it must accept such as the contractor is willing to engage for. And publication of proposals must be an empty ceremony when there is no chance for competition, and when the choice of the patented improvement is practically equivalent to a choice of the contractor at his own price.

The charter was designed not only to provide against extravagant prices, but also, (as is very clear from many clauses), to prevent the opportunity of favoritism and corruption in the Council. If there are several different kinds of paving, and only one is patented, the patentee, retaining his monopoly, would find it well worth his while to be liberal in inducements to select his plan, and could afford to be all the more liberal because he could recover back his outlay by enhancing his prices. But those whose bids were open to competition would, to say the least, stand on a much less favorable footing. While there is no reason for imputing any wrong motives in this case, and while I do not believe that many public bodies are open to these sinister influences, yet it is not to be denied that this is one of the dangers in the eye of the legislature, and I can conceive of no more fruitful source of possible inducements to corruption than the monopoly of paving the streets of a large city.

It must not be forgotten that while the adoption of a new style of paving may be convenient, it can never be necessary. No patent continues beyond a few years, and a city that is within fourteen years of the last improvement can not be very backward in progress. Moreover, the real merits and durability of a new pavement can never be fully tested very much before the term of privilege has approached its close. As each new plan is generally somewhat expensive, its adoption must always require some consideration. The cost of paving is never a very light burden, where property is unproductive, and falls heavily upon many who are not able to bear any needless charges. Those plans which have been tried and best known are apt to be reasonably economical. The charter requires these safeguards to protect the individual citizen upon whom this expense is charged, and nothing short of necessity can render it expedient to open the door to unchecked expenditure. I can not see any strong reason for assuming that if this very case had been presented to the legislature they would have found in it any occasion for qualifying their language, or for removing the restrictions which they have in terms imposed.

I think the case comes within the spirit as well as the letter of the charter, and that the injunction should be made perpetual.


source: Caselaw Access Project

author: Graves J.

license: Public Domain

text:
    The People ex rel. Edmund Heather and David W. Allison v. Benjamin D. Pritchard, Commissioner of State Land Office.

      Swamp Lands: Contractors: Selection. Under the act of 1859, p. 210; providing that contractors for the building of roads might elect to take swamp lands in lieu of money in liquidation of their contract, etc., held, that they were not entitled to select lands which were not subject to entry at private sale.
    The purpose of the legislature was to make no distinction between contractors and other persons as-to the value of the consideration to be received by the State for the lands. And it was never intended that such contractors should have the right to select at pleasure from the body of lands not placed in market, and from which all the other persons had been excluded from purchasing.

      Heard July 7th.

      Decided July 13th.

      Mandamus.

    This was an application to compel the Auditor General to execute deeds for certain swamp lands.
    It was based upon the following petition:
    “ Your petitioners, Edmund Heather and David W- Allison, of the County of Saginaw, in the State of Michigan, respectfully represent:
    That by virtue of an act of .the Congress of the United States, approved the 28th day of September, 1860, entitled “An Act to enable the State of Arkansas and other states to reclaim the ‘Swamp Lands’ within their limits,” there was granted to the State of Michigan, amongst others, the following lands, in the lower peninsula of said state, the northwest quarter, and the southwest quarter of the southeast quarter of section thirteen, and the southeast quarter of northeast quarter of. section fourteen, and the west half of northwest quarter of section twenty-one, in town twenty-five north, range seven west, containing in all 320 acres; and which lands were afterwards duly conveyed to the State of Michigan, prior to the 20th day of December, 1866, and known as swamp lands.
    That on the 18th day of August, 1865, one Ira Amsbury entered into a certain contract to construct section eight, part of a certain road, called the Saginaw, Gratiot and Newaygo road, which part so to be constructed commenced at section stake number seven, and ending at stake number eight, according to the specification contained in said contract.
    That said contract was duly signed and executed by said Amsbury, on his part, and by a local commissioner of said road, duly appointed and authorized for that purpose, and on the 20th day of December, 1866, was duly approved in writing endorsed thereon by the Governor of the State of Michigan.
    That in and by said contract the said local commissioner bound himself officially to certify to the completion of the said road, when so completed, and to cause to be issued to the said Amsbury, by the Commissioner of the State Land Office of the State of Michigan, certificates for 320 acres of land, to be selected by the said Amsbury from any of the swamp lands in the State of Michigan, in the lower peninsula, applicable to the construction of said road, according to the rules and regulations in force in the office of said Commissioner of the State Land Office.
    That afterwards the said Amsbury did proceed to construct, and did complete the section of said road referred to in said contract, and, in all respects, perform said contract, in every particular thereof, on .his part to be performed; and afterwards, on the 28th day of November, A. D. 1867, the Swamp Land Road Commissioner of said state having certified and reported that said contract had been completed in good faith, and said contract fully performed, the same was duly approved by the Board of Control of tbe State of Michigan, and a warrant issued by the Auditor General for the payment thereof, and all things done and acts performed on the part of said Amsbury, which entitled him or his assigns to payment for the construction of said road.
    Your petitioners also state, on the 27th day of April, 1867, the said Ira Amsbury, by his certain writing, duly acknowledged and delivered to your petitioner, did sell, assign and transfer unto your petitioner, by the name and style of Heather and Allison, all his right, title, interest and claim to the 320 acres of state swamp land called for in his contract above set forth, the original of which assignment was duly acknowledged and filed with the Commissioner of the State Land Office of the State of Michigan, in his office at Lansing.
    That on the 27th day of May, 1868, your petitioners in writing applied to the Hon. Benjamin D. Pritchard, who then was,. and now is, Commissioner of the State Land Office of the State of Michigan, for certificates of purchase of the lands herein described, in payment for the construction of said road. That such lands were known as swamp lands, and no person had any possession, right, title or claim thereto, other than the State of Michigan and your petitioners, and they were, as your petitioners submit, subject to be, and were selected for the purpose of payment of the labor performed under said contract.
    That said Commissioner refused to so issue any patent, certificate or conveyance for said lands, to your petitioners, and answered that said lands were not in market and subject to private entry, having never been offered at public sale or auction, or brought into market in accordance with tire provision of law, and therefore patents could not be issued for the same; not denying, and he does not deny the right of your petitioners to such lands, if they are liable to Ire so selected, and are subject to be conveyed in payment as aforesaid.
    Your petitioners therefore pray that a writ of mandamus may issue, directed to the said Benjamin D. Pritchard, as Commissioner of the State Laud Office for the State of Michigan, commanding him to issue, under the seal of his office, a proper certificate of purchase, patent, or conveyance, in due form of law, of the premises above described, and deliver the same to your petitioners, that they may have the same in payment of the contract price for the construction, by said Amsbury, of said section of said road; and that your petitioners may have such further or other relief as they above show themselves entitled.”

      D. Danvin Hughes, D. G. Holbroolc and J. W. Longyear, for relator.
    1. The grant of swamp lands by Congress provided two methods of applying the lands to the object of the grant.

      First, By sale;

      Second, By application of the lands in kind.
    2. The legislature have provided both methods of disposition of the land; under the first, the lands must be offered at auction, but under the second, the lands are applied directly to the accomplishment of the purposes of the grant. Laws of 1862, p. 56, and the acts which it amends; Laivs 1864, L- 90.

      a. The acts taken together form one system, and must be construed together.

      b. They must receive this construction, because, on their face, such is the natural import of the language used.

      c. There is nothing in the subject matter of the acts, or any extrinsic fact, which makes it necessary to adopt any other than the natural construction of the language.
    d. The same competition exists in one construction as the other.

      e. The lands are to be selected at their minimum price. There is no minimum price to lands which have been made subject to private sale, by offering at auction.

      Wm. L. Stoughton, Attorney General, and A. B. Maynard, for respondents.
    The State Land Office is established, and the powers and duties of the Commissioner defined by statutes.— Comp. L. p. 770.

      The lauds known as state swamp lands were granted to this state by Act of Congress of September 28th, 1850. — 9 U. 8. 8tat. at large, 519.

    The disposition of these lands is a proper subject matter for legislative discretion and judgment, and can not be inquired into in this proceeding. It is a question of state policy which courts can not remedy even if wrong. — Sedgw. on Stat. and Const. Lato, 808.

    The acts of the legislature of this state of • 1851, p. 322 1 C. L. 799 — of 1857, p. 234, and of 1858, p. 169, contemplate the sale of these lands, and each act contains a provision that the lands shall be offered at public sale before they were subject to private entry. In 1859, the system of draining these lands by means of state roads and ditches was adopted. — 8. L. 1859, 810; Id. 1861, 187; Id. 1862, 56.

    But the provisions for the sale of lands were clearly recognized and continued. — 8. L. 1859, 266; Id. 1861, 139; Id, 1862, 56.

    Section 5 of the act of 1859, p. 314, as amended by 8. I. of 1861, p. 189, and 1862, p. 56, appropriates the proceeds of the sale of these lands to the payment of the construction of roads and bridges, and also provides that the contractors may select lands at the minimum price in lieu of money.
    The question now arises, what lands were the contractors 'authorized to select?
    We claim that they could only select such lands as were subject to entry at private sale. When these acts were passed the swamp lands were required to be first offered at public sale. — 1 C. I. 799; 8. L. 1858, 170.

    These acts are in full force. It can not be said that they are repealed by implication. — Sedgw. on 8tat. and Const. Law, 128.

    They can be harmonized and made consistent, and evidently express the intention of the legislature, and therefore -must stand. — 2 Mich. 139.

      The contract set forth in the petition does not comply with the provisions of section 8 of the Act of 1861, p. 141.
    The letting of the contract is not a public sale of the land. — S. L. 1868, 880.

   Graves J.

The only question raised, by the return to the writ in this case, is whether the contract mentioned therein, for constructing a portion of the Saginaw, Gratiot and Newago State Eoad, entitled the contractors, or their assignees, to select any swamp lands, to be received in payment, which were not subject to entry at private sale. It is maintained, on the part of the respondent, that the selection of any such lands, not subject to private entry, was unauthorized, while, on the other hand, the relators contend that -any swamp lands of the state, in the lower peninsula, were subject to selection, whether they had been offered at public auction or not.

The view entertained by the respondent would result in substituting for the cash price of the contract an equivalent in value from the lands in market; while the ground taken by' the- relators would give to the contractors or their assignees the same quantity of land not purchasable by others, and greatly exceeding in value the money standard of the contract.

In order to determine which of these opinions is correct, it is only necessary to recur to the contract in question and to some of the legislation respecting the swamp lands.

The contract referred to, was made in 1866, and the' Act for the construction of the road was passed in 1864. tless. L. p. 90. The first section provides for the establishment of the road, and the second and third sections are as follows:

“ Sec. 3. Said road to be laid out and constructed under tlie pro visions of Aot 117, Sees. L. 1859. Approved February IS, 1859, and the Acts amendatory thereto.
Sec. 3. To secure the construction of said road, there is hereby appropriated an average of 640 acres of state swamp land to the mile, to be expended under the provisions of said Act, and the Acts amendatory thereto.”

It is evident that this act is but a supplement to the law of 1859, as amended, and that the appropriation which it maltes, must be governed by. the provisions of that law, and be subject to the same modifications and restrictions to which the terms of that law are subject. The Act of 1859 — Sess. L. 1859, p. 810 — as finally amended in 1862 — Sess. L. 1862, p. 56 — -appropriated, of the money to accrue upon the sale of swamp land, an average amount ¡3er mile on each road, not exceeding the value of six hundred and forty acres of said lands, at the minimum price fixed by the laws of this state, and provided that any contractor for the construction of any such road, or any part thereof, might elect to take lands in lieu of money, in liquidation of such contract, or any portion thereof, equal to the contract price for the construction of two miles, or in payment of existing cash contracts, then accepted and approved, and that no more than an average of six hundred and forty acres of said lands should be stipulated to be paid per mile for any road.

It is seen that the law just mentioned refers to another law fixing the minimum price of these swamp lands.

The former law is, by the nature and subject of this reference, closely connected with the latter. The law thus referred to is found in sections one and two of the Act of 1858 — Sess. L. 1858, p. 169 — the other portions of the act having been repealed. These sections which remain in full force are as follows:

“ Seo. 1. That the swamp lands granted to said state by Act of Congress, approved September 28, 1850, shall continue under the supervision of the Commissioner of the State Land Office, and subject t-o sale Ity him, as hereinafter provided; but none of said lands shall be offered tor sale prior to the issue of patents to the S(ate therefor.
Sec. 3. Said lands shall first be offered at public sale, by auction, but shall not be sold at a less price than $1.35 per acre, which shall be the minimum price therefor, and shall be subject to entry at private sale, at such minimum price, after being offered at public auction, as in this act provided, and such lands shall be sold at public and private sale, in the smallest legal subdivisons, required by purchasers.”

It is seen, therefore, that when provision was made for a cash expenditure of an average amount per mile, not exceeding the value of six* hundred and forty acres, at the minimum price fixed by the laws of this state, the sum, until the minimum price should be changed, would be an average of eight hundred dollars ¿er mile; and that the choice between money and land, given to the contractor by the Act of 1859, as amended, was a choice between an average of eight hundred dollars per mile, or lands in lieu of it.

It is worthy of observation that this provision implies freedom of choice between land and money on the part of the contractor, and an indifference on the part of the state as to whether the one should be taken rather than the other. Such could hardly have been the case, except upon the supposition that the land and money would be equivalents in the consideration of the state. The lands were also to be in liquidation of subsequent contracts, or in payment of cash contracts then existing. This difference in phraseology is easily explained. • As to cash contracts already made, a money liability was supposed to have been incurred to be discharged by payment, while the contractors, under subsequent contracts, would be entitled to select their lands on approval of their bonds and contracts by the Governor, but would not have them in payment until performance. The effect of the final disposition of the lands would be the same in both cases.

The transfer upon the agreed consideration would surely be a sale.

We have seen that, by the second section of the Act of 1858, the land could not be in market until offered at public sale. The Act of 1859, as amended by the Act of 1862, provides that lands selected by contractors shall be withheld from market during the full time specified in the contract for the completion thereof. This language clearly implies that but for such provision the land opeii to selection would be in market, and as none could be so unless offered at public sale, the inference is very strong that no lands not in market were intended for selection.

It is urged on the part of the relators that the express authority to contractors to select land anywhere in the state, is a plain declaration that any lands may be taken. This position is deemed to be clearly untenable. The phrase itself would be extremely inapt to express that meaning; and it is well known, indeed, to have been a simple amendment of former provisions, which obliged the contractor to select his lands in the county in which the work was done. Such Avas the Act of 1859. It had no relation to the question as to whether lands not in market could be selected. The purpose was to define the territory in Avhieh a particular contractor could select lands subject to selection. The Act of March 7, 1861, Avas the last which required that the lands should be selected in the county, and in reference thereto, the Act of 1862 provides that in all those contracts made prior to March 7, 1861, Avhen the party contracted to take lands, the same must be selected in those counties where the work was performed. The Act of 1862 also distinguishes the upper from the lower peninsula, as to the right to select lands. It seems too plain to admit of argument, that this provision has no bearing upon the question as to whether lands Avhieh have never been offered for sale may be taken by contractors in lieu of money.

These statutes relating to swamp lands are not to be considered separately as isolated and independent enactments. They all bear upon the same subject, and are t© be construed together as one system, and as explanatory of each other.

When thus considered, it seems evident that the purpose of the legislature was to make no distinction between contractors and other persons, as to the value of the consideration to be received by the State for the lands. And it seems equally clear, that it was never intended that such contractors should have the right to select at pleasure from the body of lands not placed in market, and from which all other persons had been excluded from purchasing.

The course contended for on the part of the relators would produce the utmost confusion in the accounts with these lands in the offices of the Auditor General and State Treasurer, and would lead to results which could not have been contemplated, and which can not • be defended. The argument by which the position of the relators is sustained would, if carried out, completely subject to the disposal of contractors all mineral and other lands of the greatest value covered by the congressional swamp grant, notwithstanding their careful reservation from market by the state.

Before acceding to a proposition leading to such consequences, the case should be well supported and clear.

That is not the case in this instance. The position taken on the part of the relators finds support neither in the general policy of the state respecting the swamp lands, nor in the spirit of the very legislation on which the position is based. On the other hand, the view taken by the respondent accords with such policy, is reasonable -and just in itself, and appears to be justified by a sound interpretation of the laws bearing upon the question.

I think that the writ prayed for should be refused with costs.

The other Justices concurred.


text:
    Ferdinand Monnier v. Thomas W. Mizner.

      Judgment record: Effect of recitals in order denying motion Sor new trial. When a judgment is supported by the declaration, the court will not take notice of a recital of facts in an order denying a motion for a new trial, for the purpose of determining the legal question of the right to include in the judgment certain claims of rent.
    The recitals in such order are no part of the record and can not supply the want of a bill of exceptions.

      Heard and decided October 6th.

    Error to Wayne Circuit.
    The defendant in error, Mizner, sued the plaintiff in error upon a bond given by him on appeal from a commissioner awarding restitution of certain premises for the nonpayment of rent. The declaration alleges a holding by Monnier from Mizner, under successive demises, on all of which rent was due, (the first lease commencing January 1, 1866, and the last May 1, 1867,) and that the commissioner found that all the rent was due to that date. Monnier appealed to the Circuit Court, but the judgment of the commissioner was there affirmed. Judgment was given in the Circuit Court for the whole amount of the rent. After-wards, a motion for a new trial was made, and the court made the following order, to wit: '

      “The defendants having moved for a new trial, and the same having' been argued, and the court having decided that the said motion be allowed and a new trial be granted, unless the plaintiff remit from the damages awarded all except five hundred dollars, being the rent due under the written lease of May 1, 1867, and on which proceedings were instituted and judgment rendered before the commissioner for non-payment of rent, and also the rent due from January 10, 1866, to about March 1, 1866, the time of burning of the mill, (the part so deducted being what was claimed and allowed for rent between the burning of the mill in March, 1866, and the commencement of the lease, in May, 1867,) and the plaintiff now elects to make such deduction, and doés hereby remit all the damage except five hundred dollars, and it is now by the court ordered and adjudged that the plaintiff do recover against the said defendant the sum of five hundred dollars damages for rent as aforesaid, and that he have judgment therefor, with costs ■¿o be taxed.”
    This the plaintiff elected to do. The defendant brought error, and alleged for error the including in the judgment of the rent due from January to March, 1866. When the case was called, the defendant below, (the plaintiff in error) claimed that it was erroneous to include in the judgment any rent except that due on the last lease, as the eviction must have-been on account of that alone.

      Moore & Griffin, for plaintiff in error.

      T. Romeyn, for defendant in error.
   The Court held that the judgment in the case was supported by the declaration, and that, therefore, the judgment must be affirmed, unless the court could take notice of the facts stated in the order denying the motion for a new trial for the purpose of determining the legal question of the right to include in the judgment rent owing before the lease under which the proceedings, were taken.

But, held further, that the recitals in said order were no part of the record in error, and could not supply the want of a bill of exceptions, and consecprently there was nothing before the court to show whether that the eviction was or was not on the last lease alone, and the legal question suggested was, therefore, not in the case.


text:
    John Dudgeon v. Allen Haggart.

      Practice in Circuit Court: Construction of written instruments: Payment. In an action by a surety for money paid, defendant offered in evidence the following receipt signed by plaintiff : “I have this day received of A. II. $500 in money, a note for $231, and also an assignment of bis interest in a claim against the Bail Road Company to secure me $269, agreeable to said instrument of assignment, which is in full of all claims and accounts against said A. H. to date.”
    The assignment referred to was appended to the receipt and referred to a claim of *$875, which was to be applied towards the payment of said $269 when collected. Both instruments were made at the same time, and related wholly to the same subject matter. There was no evidence of its collection.

      Held, That it was the duty of the court, and not the jury, to interpret them, and in so doing to read and construe them together as parts of a single transaction.

      Held further, That said receipt and assignment did not, as matter of law import payment.

      Heard July llth.

      Decided October 7th.
    Error to Kalamazoo Circuit.
    This was an action by plaintiff to recover a sum of money paid by him as surety upon a note.
    The declaration contained a special count and the common counts.
    The defendant pleaded the general issue and gave notice of special matter.
    A verdict was rendered for the defendant.
    The facts are stated in the opinion.

      Stuart, Edwards & May, and H. F. Severens, for plaintiff in error.
    1. Misapprehension of the court as to a material fact, and the direction to the jury accordingly, are said to be unmistakable grounds for reversal of the judgment.— 1 Bailey, 482, 235; 1 Rep. Const. Ct. 200.

    2. A receipt purporting to be a payment in full, together with a conditional assignment of a certain claim, was offered in evidence, and submitted by the court to the jury for their coaisideration. This was erroi\ It was a matter of law; and for the court and not for the jury.— 2 Ind. 617; 4 Id. 154, 248; 2 Pars. on Cont. 4 and note b.

    Where there are' two instruments relating to the same transaction, they should be construed together.— 4 Blackf. 341; 1 Ind. 267; 11 Id. 236; 13 Id. 496; Walk. Ch. 56, 206, 361; 1 Mich. 202, 421; 2 Doug. 16.

    3. It was error to instruct the jury that as matter of law the parties intended the assignment as payment, and not as collateral security.
    These papers construed separately or together do not denote payment. They mean security for the sum of $269, and nothing more.
    4=. The giving and accepting of a smaller sum of money in payment or satisfaction of a larger one due, is not a valid discharge, and can not be pleaded either as payment or as an accord and satisfaction.— 9 Johns. 332; 2 Id. 448; 27 Me. 370, 378; 20 Conn. 559; 2 Strobhart, 203; 5 Gill. 218; 6 Cush. 150; 3 Barb. Ch. Rep. 621; 15 Ind. 371.

      5. It is error to give contradictory instructions to a jury — also an uncertain charge.— 12 Vt. 60; 1 Met. (Ky.) 83; 15 Gratt. 230.

      a. As is implied in the language of the court, we requested the court to construe the writings and to say that they imported security and not payment. Now if we were in error in assuming that it was the business of the court to construe these writings and it was a question for the jury, the court committed error in charging as it did that the language of the papers imported payment, and not security.
    If, in response to a request which is erroneous, the court should charge erroneously upon that point, the party in-. jured may well complain.— 32 Ill. 281.

      b. If the charge means anything, the jury were permitted to inspect and examine these writings to see if they' imported full payment and satisfaction, and at the same time the jury was told that these writings meant payment and not”security.

      May <& Bucle, attorneys for defendant in error, furnished no brief.
   Graves J.

Dudgeon sued Haggart in the court below to recover an amount paid by him as surety for Haggart upon a note of $1,300 to Woodbury, Potter and Wood. The declaration embraced the common counts in assumpsit, and a special count containing the facts connected with the undertaking.

The damages were laid at $1,000. The general issue was pleaded, accompanied by a notice of set-off, and that the defendant would give in evidence on the trial under the issue, that on or about the 10th of May, 1865, the defendant, to secure the plaintiff the payment of $269, or that portion of it not theretofore or otherwise paid or secured, did, in writing, sell and assign to the plaintiff the claim for $825, then held by defendant against the New York and Erie Rail Road Company, and authorized the plaintiff to collect it and out of the proceeds to pay himself whatever of the $269 remained unpaid, and required him to account for the balance; that on the 27th of September, 1865, the plaintiff settled, withdrew and abandoned the claim against the company, and received from them in full for said claim $202.50. *

It does not appear that upon the trial any question was made as to the original liability of Haggart, but it seems to have been contended on the part of the latter that such liability was subsequently extinguished by what the defendant called a full settlement on the 10th of May, 1865. It appears that the parties met together at that time for the purpose of effecting some adjustment of the business connected with the payment of the note by the plaintiff, and, that after some controversy, an arrangement was effected, which was reduced to writing in two parts; one being executed' by Haggart, and the other by Dudgeon.

One Stafford, a witness called for the defendant, testified that he was present at -the meeting of the parties on the 10th of May, 1865; that the plaintiff presented the note which had been given to Woodbury, Potter & Wood, and claimed that he had paid its face and some interest, and agreed that he would throw off $300 and the interest, leaving his due just $1,000; -that the defendant paid the plaintiff $500 in money, and a note of William King’s of $231, and gave the plaintiff an assignment of a claim for damages against the New York and-Erie Railroad Company; that it was then and there agreed between Dudgeon and Haggart that the $500 in money, the King note and the assignment should be in full payment and satisfaction of Dudgeon’s claim against Haggart; that Dudgeon agreed to give Haggart a receipt, and that the witness called at Dudgeon’s office and received it.

The witness produced the receipt, and also identified the assignment, which was attested by him.

The counsel for the plaintiff admitted that the transaction between the parties on the 10 th of May was correctly stated by the witness Stafford, except as to the reception of the cash, note and assignment in full payment and satisfaction.

The assignment and receipt referred to were submitted in evidence, and were as follows: “ Whereas, I am indebted to John Dudgeon in the sum of. $269, and which said sum I desire to pay, or secure to be paid; now, therefore, for the purpose of securing the portion of said claim not heretofore or otherwise paid or secured, I do hereby sell, assign, transfer and set over unto said John Dudgeon a claim, and the only claim, which I have and hold against the NeAV York and Brie Rail Road Company, for damages which occurred about the month of March, A. D. 1865, and resulting from injuries to cattle being transported over the road of said company, which said claim is for the sum of $875; and I do hereby, by virtue of this assignment, authorize the said John Dudgeon to collect the same in my name or otherwise, to pay himself from the proceeds whatever of bis'demand remains unpaid, and the balance collected the said Dudgeon is to account to me. A. Haggart. Dated May 10, 1865. In presence of Silas Stafford.”

“I have this day received of Allen Haggart a certain sum of money, say $500, and a note against William King for $231, and also an assignment of his (Haggart’s) interest to a claim against New York and Eric Rail Road, to secure me in the sum of $269, agreeable to said assigned instrument, which is in full of all claims and accounts against said’ Haggart, to date. John Dudgeon, Hal, May 10, 1865.”

It distinctly appears, by the bill of exceptions, that no evidence was given tending to show that Dudgeon had obtained anything on the claim against the Erie Rail Road Company, while he himself testified that he had received nothing upon it.

It is therefore manifest that the only subject open to controversy, on the trial, was the transaction of the 10th of May. If what occurred at that time was a complete settlement, or executed accord and satisfaction of the cause of action which, accrued, to Dudgeon upon his payment of the note, th.en there was no foundation for the suit.

If, however, that arrangement involved only the securing of the whole or of a portion of. the plaintiff’s demand, instead of the satisfaction of it, the action was of course maintainable for the sum remaining unsatisfied.

It is only necessary to examine two of the points presented in order to decide the case: One arises upon the refusal of the Circuit Judge to charge as requested; and the other is based upon a portion of the charge as actually given, and both may be considered together.

The instruction sought and refused ivas, “ that, upon the facts proved, the plaintiff was entitled to a verdict,” and the portion of the charge alluded to, embraces the 15th, 16th, and 17th paragraphs, reading as follows:

“15. As the .receipt and assignment wgre a part of the res gestee in the transaction claimed by the defendant to have been a full settlement, and by the plaintiff to have been only a partial one, and as the court has referred the question thus raised as a matter of fact for .the jury to find, and in view of all the testimony submitted to them, either oral or written, the jury will have the right to inspect these papers so far as may be necessary to determine the question or point thus submitted to them.”
“16. When there is a seeming discrepancy between portions of a written instrument, or between different instruments, where parts of one entire transaction, the rule, after giving the language its fair legal import, is, if possible, to give the instrument such a construction as will harmonize all the parts and give effect and coherence to the whole, agreeable to the intent of the parties. Such intent is to be gathered from the evidence, oral and written, before us.”
“17. After provision mad? for the $500 in cash, and the King note of $231, the sum of $269 alone remained to be provided for. The claim to be assigned was for $825. An absolute assignment of that claim in payment of the $269 would have extinguished any claim of the defendant to the surplus, whereas, by the last clause of the assignment it is evident that the parties-did not so intend. If, then, the words ‘to secure/ ‘securing/ ‘secured/ are held to import, in their connection in the papers, a simple limitation as to the extent to which the assignment was to reach, and not as to its character, whether collateral or final by payment, the difficulty in harmonizing the whole disappears. The receipt was the last paper drawn, and done in view of the whole transaction, and its language, without other qualification, imports payment and satisfaction, and, taken together, we think the assignment and receipt, by a fair and legitimate construction, may be regarded as importing the same. We should have felt inclined to remit the whole question, as a mixed one of law and fact, to the jury, but for the especial request of the plaintiff’s counsel.”

It is very evident that the 15th and 16th paragraphs of the charge standing by themselves would imply that the judge submitted the question of settlement and satisfaction to the jury as one to be determined by them upon all the evidence, oral and written. But the 17th paragraph is inconsistent with that supposition. In that portion' of the charge the jury were specifically instructed that the papers, by legitimate construction, and in view of the whole transaction, imported payment and satisfaction.

This was a direct, explicit and decisive charge, which necessitated a verdict against the plaintiff. It was probably designed to supersede, and was understood as superseding the former inconsistent direction, and was occasioned by an express request to charge upon the very point.

The decision of the case depended entirely upon .the construction of the written instruments submitted in evidence, and not upon any opinion of the jury upon verbal testimony or inferences to be drawn from facts. These instruments were made by the parties at the same time, and related wholly to the same subject matter, and it was the duty of the court, and not of the jury to interpret them, and, in so doing, to read and construe them together as parts of' a single transaction, .and not as instruments alien in their origin, object, or subject matter.— Wisner v. Davenport, 5 Mich. 501; Penn. Mining Co. v. Brady & Co. 16 Id. 332; Jones v. Phelps, 5 Id. 218; Adair v. Adair, Id. 204; Holmes v. Hall, 8 Id. 66; Rice v. Dwight Man. Co. 2 Cush. 80; Noble v. Bosworth, 19 Pick. 314; Stevens v. Cooper, 1 Johns. Ch. 425; 9 Cow. 754; Thompson v. Ketcham, 8 J. R. 190; Renard v. Sampson, 2 Duer, 285; Blossom v. Griffin, 13 N. Y. 569; Lake Ontario R. R. Co. v. Mason, 16 Id. 451; Rawson v. Lampson, 5 Id. 456; Norton and Norton v. Coons, 3 Denio, 130; Howe's Executor v. Woodruff, 21 Wend. 640; Bronson v. Green, Walker's Ch. 56; Norris v. Showerman, Id. 206; Same case, 2 Doug. 16; Bird v. Hamilton, Walker’s Ch. 361; Street v. Dow and Bort, Harrington Ch. R. 427; Meads and Schuyler, v. Lansingh, Hopkins, R. 124; Smith v. Faulkner et al. 12 Gray, 251; Hutchinson v. Bowker, 5 Mees. and Weis. 585; Turner et al. v. Yates, 16 How. 14; Macbeath v. Haldimand, 1 Term, 172, 180, per Lord Mansfield; United States v. Nicholl, 12 Wheat. 505, 510; Jackson v. Dunsbagh, 1 Johns. cases, 92.

Was the Circuit Judge correct in stating, as law to the jury, that the assignment and receipt imported payment? We are all of opinion that he^was not.

The reception of the claim against the Erie Rail Road Company did not constitute paymept unless Dudgeon agreed to accept it in that manner.— Gardner v. Gorham, 1 Doug. 507; Vail v. Foster, 4 Comstock, 312; Coonley v. Coonley, Lalor's Supp. 312; and note a. And whether he so agreed could only be ascertained by recurring to the writings which the parties had made the repository of their understanding on the subject.

These writings, though iuartificially drawn, appear to us to prove that the $500 in money, and the note of King for $231, were received in payment of an equivalent amount of the plaintiff’s demand, but that the large claim against the Bailroad Company was transferred and received as security only for the balance of that demand.

That Haggart did not intend to surrender or transfer to Dudgeon, absolutely and without recall, the whole claim with all its fruits against the Bailroad Company, is made certain by the terms of the assignment; and there is nothing in the papers to indicate that any particular portion, as distinguished from the residue, was the subject of such absolute disposition.

The bare transfer and reception of a thing in payment, amounts to an extinguishment of all right in the party transferring, to the thing transferred, and to the subsequent fruits of it, and implies an engagement not to re-assert any portion of such right; but the disposition of a thing, by way of security, is not only compatible with an existing right of the grantor, but in its own nature implies the retention, at the time, of some qualified right respecting it, by him.

In the present case the whole claim, and not merely a distinct or an undivided portion of it, was placed in the hands of Dudgeon, on the express understanding that he should be accountable to Haggart in some way for all of it. This was a clear disposition of the claim by way of .security and not in payment or satisfaction; since the right to the account stipulated for was incompatible with that dominion signified by ownership, and involved in the transfer in satisfaction, and was entirely consistent with the holding as security.

We are therefore of opinion that there was error in the instruction, that the “assignment and receipt imported payment;” and also in the refusal to charge, that the plaintiff was entitled to recover.

The judgment should be reversed, with costs, and a new trial ordered.

The other Justices concurred.


author: Campbell J.

text:
    Winslow P. Burhans et al. v. Phœbe G. Corey et al.

      Delivery of goods: When bound by notice. Where-a person, is entitled to notice, and has not stipulated or consented to have it transmitted hy mail or other channel, he is not bound by any notice until actually received, and is not in default if acting promptly thereafter.

      Joint and several action: Agency. Where wool belonged to different parties in severalty, and that was understood by the purchaser, the fact that the contract of sale was made by a person interested in a part, and agent for the rest, and at a uniform price per pound, does not make it a joint sale, but the transaction is several, and separate actions for violation of such contract should be brought by the parties interested in each separate parcel instead of one joint action.

      Statute of Frauds: Fa?'nest Money: Delivery. A sum of money paid as earnest in such a transaction to the person acting for all, will be regarded as belonging ratably to the venders of the different parcels, and will, therefore, bring all of them within the protection of the provision of the Statute of Frauds legalizing parol sales without delivery, where earnest money is given to apply on the price.

      Heard July 11th.

      Decided October 7th.

    Error to Ionia Circuit.
    This was an action brought by the defendants in error to recover damages for a breach of special contract. The declaration averred that on the first day of September, 1864, the plaintiffs were the joint owners of a large quantity of wool, to wit: six hundred pounds, and that they bargained and sold said wool to the defendants, who agreed to pay them therefor one dollar per pound on its being delivered to them at Ionia; and it further averred that the defendants did then and there pay the plaintiffs thirty dollars in part payment of the price thereof. It also averred a delivery of the wool according to the contract, and a refusal to receive by the. defendants.
    Defendants pleaded the- general issue, and gave notice of set - off.
    Judgment Vías rendered for plaintiffs.

      O. I. Wallcer and 8. T. Douglass, for plaintiffs in error.
    The contract in this case was not in writing, and the plaintiffs claimed, as their testimony tended to prove, that the contract was substantially as it was alleged to be in the declaration, viz: That the plaintiffs contracted to sell their wool to the defendants at one dollar per pound, and that upon that contract the thirty dollars was paid. The defendants claimed, as their testimony tended to prove, that but one contract was made, and that was for the sale of the wool of Ann Oorey, as well as that of the plaintiffs, and that the thirty dollars was paid upon that entire contract.
    The testimony on both sides tended to show, and without contradiction, that the thirty dollars was paid in one solid sum, and upon only one contract. It was only the contract on which that thirty dollars was paid that could be the ground of action under our statute of frauds. — 0 Comp. L. § 3184.

    On the trial, the defendants requested the court to charge the' jury that if they found that the defendants purchased the whole of the wool owned by the plaintiff and Ann Oorey in one entire contract, and that the thirty dollars was paid to bind the bargain' for the whole of the wool, then there is in law a non-joinder of plaintiffs, and the plaintiffs can not recover; but the court refused so to charge, and did charge that there was no evidence that Babcock authorized Mrs. Corey to sell any other wool than their own, and therefore there was no non-joinder of plaintiffs; to which refusal and charge the defendants excepted.
    It was a question of fact for the jury to determine whether the contract was, as claimed by the plaintiffs, or as claimed by the defendants, and their verdict should have been accordingly. It was entirely immaterial whether Mrs. Oorey had or had not authority from Babcock to sell their joint wool in the same contract with that for the sale of Ann Corey’s. If the contract was as is claimed by plaintiffs, they were clearly entitled to a verdict. If it was as is claimed by defendants, then they were as clearly not entitled to one. For, in the latter ease, they have not proved the contract as paid, and the thirty dollars was paid upon an entirely different contract from the one relied upon. If Mrs. Corey had no authority to make one entire contract for all the wool and yet did so, her want of authority would not change the contract made into an entirely different one.
    If the contract was entire and the thirty dollars was paid upon the contract for all the wool, then all the parties not only might, but should have joined.— 1 Chitty Pl. 13 and notes; 1 Pars. on Con. 21, 26, and notes.

      We submit, therefore, that there was error in the refusal to charge, and in the charge as to non-rejoinder.

      L. B. Soule, for defendants in error.
    1. A new trial will not be granted for a refusal of instructions, not based upon evidence in the case, whether erroneous or not.— Hilliard on New Trials, 234, 235. Or, of instructions assuming a fact, or facts, not proved and not in the case.— 30 Ala. 253; 10 N. Y. 207.

    There being no evidence in the case on the subject of notice by mail, the judge could make no charge thereon. 1 Wend. R. 511; 15 Penn. 59; 3 Duer, 370; 12 Barb. 84; 1 Denio, 586.

    2. When there is simply an agreement that the defendants shall notify the plaintiffs when they want them to deliver certain property, and no mode of notice is agreed upon, the law would imply personal or actual notice, and if the defendants made a choice of a particular mode of giving the plaintiffs the notice, certainly the defendants must run all risk of the means adopted for that purpose. 30 Vt. 728; 18 Barb. 392; 25 Id. 635, 646; 32 Mis. 68; 9 B. Mon. 253.

    None but.parties having a joint interest in the subject matter of'the contract can join in an action in assumpsit for a breach of it. — Bari, on Parties, pp. 31, 32; 1. Saund.

      153, note 1; 8 Sergt. and R. 308; 10 Id. 257; 10 East, 418; 1 N. Y. 392; Broom, on Parties, 18; 1 Chitty on Pl. 9, 10; 4 Johns. 24; 5 Id. 176; 19 Id. 213, 426.

   Campbell J.

Defendants in error sued plaintiffs in error for the price of certain wool sold to them, which they refused to accept and pay for. It was claimed, by plaintiffs in error, that they were exonerated from default, because the wool had not been delivered to them within a reasonable time after notice was mailed directing it to be forwarded. The court charged that, unless the jury found the notice was to be given by mail, the time of the receipt, and not of the mailing, would govern.

This • ruling was correct. There appears on the record no evidence tending to prove any agreement for a notice other than personal, and the negotiations for purchase were all verbal. A party can be in no actual fault who proceeds to comply with a notice as soon as he receives it; and to hold him guilty of a constructive default, when he has always been willing to do his duty, can only be allowed where he has consented to run the risk of the safe transmission through a given channel. The ruling was in conformity with this principle, and was all that plaintiffs in error could have asked.

Another ground of error alleged, depends upon a claim, set up on the trial, that the actual contract of sale embraced the wool of one Anne Sunderlain, as well as that of' defendants Corey and Babcock, it being asserted that there was a defect arising out of the non-joinder of Anne .Sudderlain as a plaintiff.

It appeared, without dispute, that Mrs. Corey made the bargain in question with an agent of plaintiffs in error. Smith, the agent, saw Mrs. Corey, and endeavored to purchase the wool owned by, her and Babcock, he being fully informed concerning this ownership. She referred him to Babcock, who was then absent some distance at his mother’s.

Smith’s recital of the matter is this: “Mrs. Corey said that she and Babcock had concluded to sell their wool together, and that I must go and see him. I went and saw Babcock, and told him the same things I had Mrs. Corey, and he said first he did not wish to sell; but finally said if Mrs. Corey wants the money she might sell the wool; any bargain she might make he would abide by, and that he would deliver the wool by the time I wanted it. I went back and told Mrs. Corey what Babcock had said. I spoke of Ann’s wool and said I wished to buy her’s also; did not see Ann; she was in another room. Mrs. Corey went and saw her, and came back and said I could have all the wool on the place, Ann’s and Babcock’s, at $1 per pound. I bought it at that price, and paid $30 to bind the contract for all the wool.”

The court was asked to charge the jury that the statement made by Babcock to Smith, and by him conveyed to Mrs. Corey, was sufficient to authorize Mrs. Corey to sell their wool and Ann’s in one contract. This was refused, and we think correctly. Babcock had not had his attention called by Smith to any wool but that in which he had an interest with Mrs. Corey, and no allusion was made to Anne at all. The mission of Smith was only to get Babcock’s consent to the terms proposed to Mrs. Corey. To allow his language, called forth by this state of things, to be applied to another and very different thing, which would have involved him in liabilities for a third person in whose concerns he had no interest, would be in violation of fairness and of good sense. There is no ambiguity in his expressions, and they can only apply to the property in which he was a joint owner, and concerning which alone he had been applied to.

The court was also asked to charge that if plaintiffs purchased all the wool owned by Mrs. Corey, Babcock, and Anne Sunderlain, tbe amount of the wool or the number of pounds to be subsequently ascertained in one entire contract, and that the $30 were paid to bind the bargain for tbe whole, there was a non-joinder of plaintiffs, aud plaintiffs could not recover.

This the court refused, and said there was no evidence that Babcock authorized any suck joint arrangement.

We think there is nothing in any of the testimony tending to prove any such contract. Smith made all his arrangements knowing that there was no common interest in all the wool and that it was owned in severalty. There is nothing in the remotest degree tending to show air attempt to combine them. The wool was sold by tbe pound, and not for a round sum, and the transaction is in no respect ■ different from that where one agent sells at the same time and for a similar price the goods of several known principals. It would he absurd to hold that they thereby became jointly liable for any breach of such an arrangement. And under such circumstances the earnest money would belong to them all ratably.

There was no error in the proceedings, and the judgment must be affirmed, with costs.

The other Justices concurred.


author: Christiancy J.

text:
    John Phillips v. Ebenezer Raymond et al.
    Contract, construction of. By the terms of a contract, one Phillips agreed to take and receive from defendants all of certain lumber that their mill should get out, up to October 15, 1864. That the price per thousand feet was fixed; and the lumber was to be delivered at a certain pier.
    That said Phillips should pay said defendants $500, February 1,1864, on logs already purchased by them; said amount to be secured by logs and placed in the name of said Phillips on the hooks of defendants, and thereafter all logs to be purchased in the name of said Phillips; and the said Phillips agreed to pay on them $500 March 1, and $500 March 15. The balance of payments to be made on delivery of said lumber, in drafts, payable at thirty and sixty days’ sight, in Chicago. That if the measurement of said lumber should overrun the scalage, the difference to belong to said Phillips, and all lumber remaining unshipped after October 15, to be paid for at that time in drafts as above mentioned.
    Under said agreement a large amount of logs were got out and placed in the name of plaintiff on defendants’ books, and sawed by defendants, and a portion of the lumber delivered.
    In an action of replevin, brought by plaintiff for part of this lumber, it was held,
    1. That the effect of said contract was to place the logs, out of which said lumber was manufactured in the name of the plaintiffs as security only.
    2. That the object of the security was not only to secure any advances that might be made, etc., but for the faithful performance by defendant of the entire contract on their part.

      Held further, That defendants were bound to deliver said lumber on a proper demand, and that the refusal of the defendants to deliver, without assigning any reason or claiming anything due them (it not appearing that the plaintiff refused to pay according to the contract), rendered it unnecessary to inquire into the state of the accounts between the parties.

      Heard July 11th.

      Decided October 7th.
    Case made from Allegan Circuit.
    This was an action brought to recover the possession of 50,000 feet of lumber, claimed to be the property of plaintiff, and unlawfully detained by defendant.
    The declaration was in the usual form, and the plea was the general issue.
    Judgment was rendered in favor of plaintiff.
    The case turns upon the construction of a certain contract, and which is fully set forth in the opinion.

      D. Darwin Haghes, for plaintiff.

      A. B. Maynard, for defendants.
   Christiancy J.

This was an action of replevin for about fifty thousand feet of white wood lumber, consisting of chair plank and boards. The plaintiff recovered a judgment in the court below, which is brought to this court upon a case made for review upon the law and the facts, under the statute which has since been repealed.

The main question in the case depends upon the construction to be given to a written contract, of which the following- is a copy:

Memorandum of agreement, between Raymond & Abbott, Ganges, Allegan Gounty, Michigan, and John PhiUips, chaw' manufacturer, Chicago, Cools Gounty, Illinois.
Fkst, That the saicl John Phillips agrees to take and receive from the first party aforesaid, all the cherry, white wood, beech and maple lumber that then- mill is able to get out up to the fifteenth day of October next, 1864.
Second, That the said lumber shall be cut according to bill rendered by the said John Phillips.
Third, That the price to be paid for the same is $16 per thousand feet for cherry, and $10 per thousand feet for white wood, beech and maple, delivered on board vessel at Pier Cove, Michigan.
Fourth, The said lumber is to be measured by the parties interested, or others chosen by them.
Fifth, The said John Phillips to pay said Eaymond & Abbott $500 on the first day of February next, on logs already piurchased by them, said amount to be secured by logs, and placed in the name of John Phillips on the books of Eaymond & Abbott, and thereafter all logs to be purchased in the name of said John Phillips; and the said John Phillips agrees to pay on them $500 on the first of March, and $500 on the fifteenth of March: The balance of payments to be made on delivery of said lumber, in drafts payable at thirty and sixty days sight in Chicago.
Sixth, It is understood that if the measurement of said lumber overruns the scalage the difference belongs to said John Phillips, and all lumber remaining unshipped after the fifteenth of October to be paid for at that time in drafts as above mentioned.
U. S.^ Revenue Five Ceuta,
RAYMOND & ABBOTT,
JOHN PHILLIPS,
per M. S. Phillips,
Ganges, January S3, 1864.”

Under this agreement a large amount of logs were got out and placed in' the name of the plaintiff on the books of the defendants, and subsequently sawed by defendants; and it was for a part of this lumber that the action was brought.

It will be noticed that this contract fixes no price for the logs, nor is any specified amount of logs required to be got out; nor was the plaintiff thereby bound to make advances upon logs at any particular rate, in proportion to the amount of logs which the defendants should obtain. But all the plaintiff was, by the contract, bound to pay or advance on logs was $500 on the first of February (“on logs already purchased” by defendants,) $500 on the first of March, and $500 on the fifteenth of March, “the balance of payments to be made on delivery of said lumber, in drafts payable at thirty and sixty days sight in Chicago. This balance can not be construed as intended to include only the balance on logs; but it clearly includes, if it is not confined to, the balance which might become due for the lumber to be delivered, at the prices fixed by the contract, after deducting the $1,500 required to be paid by the plaintiffs on the days mentioned. But it would seem from the testimony of William Phillips, the plaintiff’s agent, that there was some subsequent understanding by which the logs were to be called $5 per thousand feet.

Besides the logs already purchased by the defendants, a large amount of other logs were purchased by them and placed in the name of the plaintiff on their books, subsequently sawed at their -mill, and some three hundred and eighty - eight thousand feet of the sawed lumber had already been delivered to the plaintiff, when the defendants refused to deliver the balance, some fifty thousand feet, sawed from the same logs, for which this action was brought.

The plaintiff had, from time to time, paid considerable sums, before and during the delivery of the lumber. But the exact state of the account may, or may not, be material, according to the interpretation given to the contract, and the ground upon which the defendants based their refusal.

Did this contract have the effect to make these logs and the lumber produced from them, in the hands of the defendants, the absolute property of the plaintiff, irrespective of the question whether he had paid, as by the contract required? I think not.

Construing the instrument with reference to the situation of the parties and in the light of the surrounding circumstances, I am satisfied that the real intention was to place the logs in the name of the plaintiff, as security only. The logs already on hand, it is expressly declared, shall be placed in the name of the plaintiff as security. The other logs were to be purchased and placed in the plaintiff’s name, and he was to pay further sums of money, on the days specified, and though, as to these logs, the contract does not expressly say “as security,” yet, as they are placed in the same condition in all other respects, and all alike to be sawed and the lumber delivered to the plaintiff at the same specified prices to be paid by him, I see no possible ground for making any distinction between the logs “already purchased,” and those to be purchased; and I am entirely satisfied that, upon the true interpretation of the contract, they were all alike to be held as security, and not as the absolute property of the plaintiff. By the contract the plaintiff was only bound to pay §1,500 as applicable to logs, while all the logs the defendants should thereafter purchase, though they might amount to three times that sum, were alike to be put in his name; and if it is true, as plaintiff’s testimony proved, that the logs -were understood to be §5 per thousand feet, then it is clear, from the quantity of lumber actually delivered, that defendants must have purchased logs much beyond what the §1,500 would pay for — to say nothing of the fifty thousand feet they refused to deliver. If the intention was that they should be held (with the lumber they should produce) as the absolute property of the plaintiff, then, if the lumber were all sawed, and the plaintiff should refuse to make any payments for the lumber delivered to him under the contract, the defendants would have no right to refuse to deliver the whole, though they should not have received a cent, and though the plaintiff was, by the contract, bound to pay for it on delivery in the manner specified. Clearly, as it seems to me, this could not have been the intention of the parties.

But it is urged that the sixth clause of the contract, giving the plaintiff the excess, if the measurement of the lumber should overrun the scalage of the logs, is repugnant to the idea of mere security, and conclusive that the absolute property was intended to pass. In some kinds of contracts, and under a different state of circumstances, such a clause might have a strong bearing in the direction claimed. But in the present case, this view, as I have endeavored to show, would be in conflict with the whole scope and object of the contract. And when we consider .that the plaintiff was making advances without any stipulation for interest, and that it would have been perfectly consistent with the idea of security only, to have inserted, in place of this stipulation, an agreement for interest at ten per cent, or for the delivery of lumber beyond what these logs should make, or that eleven hundred feet should be counted as one thousand in making delivery, it is not difficult to see that the present stipulation may stand upon the same principle; and on this view, it will be found in no way repugnant to the idea of mere security. It was competent and not unreasonable for the plaintiff, in agreeing to advance his money on these logs and to take the lumber at specified prices, to stipulate for such advantages ip regard to the lumber as the defendants were willing to assent to. The fact that the defendants had the logs assessed to the plaintiff instead of themselves, can not alter the construction of the contract. This was a subsequent matter arising between other parties, and though the defendants may have been anxious to escape taxation, this did not change the legal effect of the instrument.

But the more important question is, first, whether the logs and lumber were to be held as security merely, for the advances to be made by the plaintiff, or these and any balance of accounts at any time his due in the course of the transaction, as claimed by the.counsel for the defendants; or, second, as security both for such advances, etc., and for the performance by the defendants of the entire contractf

The contract, if we look merely to its words, is not specific upon this point; but when we consider its subject matter and the relative positions and objects of the parties, we can not suppose that security for advances upon logs, or logs.and lumber, was thb plaintiff’s only object in requiring this security. He was not engaged in the business of lending or paying out money, and taking security merely for the purpose of getting it back, without interest, or even with it. He was carrying on the business of a chair manufacturer, in Chicago, and from this fact, and the description of the lumber, it is reasonable to suppose that his principal object, in entering into the contract, was to obtain this lumber for use in that business; and that his primary object in requiring the particular stipulations of the contract, was to secure this object. And it was to this end and for this object he agreed to, and did advance his money. We must therefore conclude that the object of this security was, not only to secure such advances, and any balance of account at any time in his favor in the course of the transaction, but also for the faithful performance, by the defendants, of the entire contract on their part.

This conclusion renders it necessary to inquire whether the defendants were in fault for refusing to deliver the lumber, or whether there was any failure or refusal of the plaintiff to perform his part of the contract which would justify the defendants in their refusal.

It is very difficult, from the confused state of the evidence upon the point, to determine the actual state of the account between the parties at the time. From the best consideration I have been able to give it, I am not entirely satisfied in whose favor the balance was, if in fact there was any balance either way. The accounts would seem to have been nearly balanced. Perhaps upon the strict rules of evidence applied to the particular items, there might have been a balance in favor of the defendants of between $30 and $40; while there are some circumstances (not amounting to full proof) tending to show that certain other items ought to be allowed to the plaintiff, which would turn the balance in his favor.

But we do not, in the aspect which the case presents, deem it essential to ascertain precisely the state of the accounts between the parties. The defendants did not base their refusal to deliver the lumber upon the ground that the plaintiff was in arrear, or had not paid according to the contract.

There is some slight evidence that in excusing to other persons, not interested, their refusal to deliver the lumber, the defendants claimed that the plaintiff was owing them. But there is no legal evidence in the record showing, that in any of the interviews with the plaintiff’s agent, who demanded the lumber, the defendants claimed that there was any thing due, or that the plaintiff had failed, in any particular, to perform his part of the contract; a claim which it would have been very natural for them to make on such an occasion, if it had airy basis in fact.

On the contrary, when the defendants were requested to deliver the lumber, their reply was that “'they had no lumber then belonging to John Phillips (the plaintiff); that they would ship no more lumber on this contract; that the contract was good for nothing; that they had found out the contract did not bind them, and they would deliver no more lumber on it.”

The plaintiff’s agent tendered them $500 (which would have paid for the fifty thousand feet demanded), demanding the lumber, which they refused, and the money was left in the hands of Weaver for them. The agent also stated that the books showed that defendants owed the plaintiffs; and that, if plaintiff owed them anything, he would pay them in drafts at thirty and sixty days sight. To this they appear to have made no reply; and, so far from claiming any particular sum due, did not insist that there was anything due, but silently adhered to their refusal.

Payments, by the contract were to be made in drafts, and there is no evidence that the plaintiff had ever refused to pay as agreed. Under these circumstances, it does not lie with the defendants to say that if they had even claimed any particular amount due them, it would not at once have been paid. Their conduct, and the mode of their refusal, under the circumstances, cei’tainly excused the plaintiff from any further tender of performance.

The defendants, on the second day of May, had written to the plaintiff, complaining that “owing to the rise in men’s wages, their board, and all material for running their mill, they found that they were running behind in manufacturing lumber for him at $10,” and they ask the plaintiff to allow them $2 more per thousand feet. This he does not seem to have acceded to. Taking this in connection with the manner of their refusal, it would seem to authorize a slight inference at least that the true reason for their refusal was that they found they were losing money by manufacturing lumber under the contract.

But, so far as this may bear upon the state of the accounts between the parties, we decide nothing. We see no valid excuse for the refusal of the defendants to deliver. The plaintiff was therefore entitled to recover, as held in the court below; and judgment must be rendered in this court for the plaintiff, with costs in both courts..

The other Justices concurred.