author: Hooker, J. Grant, J.

text:
    BARNUM v. GRAND TRUNK WESTERN RAILWAY CO.
    1. Railroads — Crossing Accident — Contributory Negligence— Question for Jury.
    In an action against a railroad company for the death of a person by being struck by an engine backing across a street on which deceased was driving in a closed wagon, and attempting to cross the track just after a gravel train going in the same direction had passed, which the locomotive was backing out to assist over a grade, evidence examined, and the question whether deceased was guilty of contributory negligence held to be for the jury.
    2. Same — Negligence—Engine Following Train.

      Held further, that negligence of the defendant cannot be inferred from the mere fact that the engine immediately followed the train.
    Error to Genesee; Wisner, J.
    Submitted January 12, 1904.
    (Docket No. 19.)
    Decided October 4, 1904.
    Case by Hartsoñ G. Barnum, administrator of the estate of George F. Nixon, deceased, against the Grand Trunk Western Railway Company for the alleged negligent killing of plaintiff’s intestate. There was judgment for plaintiff, and defendant brings error.
    Reversed.

      E. W. Meddaugh (Geer & Williams, of counsel), for appellant.

      Mark W. Stevens (George W. Cook, of counsel), for appellee.
   Hooker, J.

Deceased rode in a closed wagon upon the track of defendant’s railroad, immediately in front of a locomotive which was backing to the westward to aid a gravel train, which, had passed a short time before, in crossing a grade, and was struck by said locomotive, and received injuries therefrom, which caused his death a day or so later.

In this action, brought by his administrator, a verdict and judgment were rendered for the plaintiff for the sum of $8,710.40, and the defendant has brought the case to this •court by writ of error.

The negligence relied upon is stated in defendant’s brief as follows:

“ (1) That it failed to allow a sufficient and reasonable length of time to elapse after the gravel train crossed Beach street before the yard engine attempted to cross; that the yard engine followed the gravel train so closely that travelers and vehicles in the vicinity were not given a reasonable opportunity to cross.
“ (2) That it failed to station a competent and vigilant person on the west end of the tender to watch for persons and vehicles approaching the crossing, and to warn them cf the approach of the engine.
“ (3) That it was its duty to keep a flagman, or maintain the equivalent — that is, crossing bells, etc. — at the Beach street crossing to warn travelers of the approach of trains, and that it failed to perform this duty.
“ (4) That it failed to cause the engine bell to ring.
“ (5) That the yard engine was running at an excessive rate of speed.”

Defendant’s counsel requested the court to direct a verdict upon the grounds (1) that the evidence showed that the defendant was not guilty of any negligence that caused the injury; (2) that the plaintiff’s intestate was guilty of contributory negligence. These were refused. After the rendition of the verdict defendant’s counsel made a motion for a new trial upon several grounds; one of them being that the verdict was contrary to the weight of the evidence. This was denied; reasons being given as required by law.

As this last point requires an examination of the evidence, we will state our conclusions regarding it first, and this will require a somewhat detailed statement of the testimony. The defendant’s railroad crosses Beach street in a direction approximately an easterly and westerly course, and substantially at right angles. Within a block east of said street, this railroad is crossed by the Pere Marquette Railroad, which also crosses Beach street a few rods south of defendant’s track, going southwesterly. There was an electric’ bell upon the crossing between the two Pere Marquette tracks, so arranged as to give warning for both roads, and this was ringing as deceased approached the track. A switch, or Y, extended from one railroad to the other upon the north side of the defendant’s, road. The plat appended shows the situation.

On this Y, some distance east of the street crossing, were two cars; the westerly one being a coal car and the other a box car. From the evidence and from the plat it conclusively appears that, from a point of view 10 feet from defendant’s main track, the coal car was north of the line of vision to the eastward for a long distance; and we may also take judicial notice that an engine was visible from a wagon, when some ways farther back from the track, over the coal car, which was much lower than a locomotive, and a finding to the contrary by the jury would have been unwarranted.

The undisputed proof shows that the deceased and a boy were riding in a covered and inclosed bakery wagon, with a small glass in front and open doorways at the sides, and a window just above the seat on each side, through one of which last the locomotive might have been seen, and was seen by the boy, immediately before the deceased drove upon the track; and the boy testified that they saw a freight train going west on defendant’s road when they were half a block or more from the crossing, at which time they were crossing the bridge, 150 feet, or thereabouts, west of Lyon street. As he approached the track the boy looked east and saw the engine, and told deceased that an engine was coming. The horse was then walking. When told an engine was coming, deceased’s horse was very near the track, and the engine was very close— he thought within 15 feet. The horse got across the track and stopped, or was stopped. The engine struck the wagon and shoved it along, until it caught upon something and tipped over. The boy got out of the front window, the horse ran away, and the man went under the engine. He did not hear any bell ringing. A number of witnesses testified that they heard the bell of the engine ringing, and one or more others testified that they did not hear it.

Several of the witnesses testified that there was a switchman upon the footboard of the engine, and the crew of the locomotive and the switchman himself so testified. It also appeared that the engine was proceeding westward to make a coupling with the gravel train while in motion, which could hardly have been done in the absence of the switchman.

The switchman testified that he was upon the footboard of the engine, which was proceeding at the rate of 5 or 6 miles an hour. He saw the horse and wagon driving up toward the track, and called to him to look out, gave the engineer the signal, and stepped off; and the engineer reversed his engine and applied his air. This was done as soon as deceased indicated an intention to cross the track, and at a time when the horse was 10 feet from the track.

Kate H. Stevens, walking on the street, saw that there was going to be a collision, and ran behind a billboard so as not td see it. Her attention was attracted by the bell.

Another witness, Powell by name, heard the engine and bell, saw the smoke, and could see the top of the engine over the coal car. He told his brother there was going to be an accident. Before he was struck the engine was reversed, and the drivers were turning the other way, and the witness heard the air set. He also saw the switchman signal to stop.

The evidence relied on to show that the switchman was not there is as follows: The boy says that he did not see any one at the end of the tender. Question by plaintiff’s counsel: “Was there anybody there, now? No, sir.” Mortimer Phelps, a witness for the defendant, is said to be one who testified that no brakeman was on the engine; but the nearest that he came to it was to say that “ when I got there the fireman, brakeman, and another man were assisting the man out from under the engine.” How this shows that the other man had not been upon the footboard is not very clear, nor do counsel attempt to explain how the brakeman happened to be there, if not one of the crew of the engine. He stated on redirect that he did not see the brakeman on the tender. Ewer was on a Pere Marquette engine, some distance away, and did not see any one standing on the tender, or see any one jump off. Rothwell, a Pere Marquette switchman, some distance off, saw the engine, but did not see any one on the footboard, and did not see a man jump off. He thought he would have seen it, had it occurred.

Counsel claim that, if the testimony did not conclusively show contributory negligence, the court should have granted the motion for a new trial upon the ground that the verdict was contrary to the evidence; but, as the case must be reversed upon another ground, we do not pass upon the latter question.

The court instructed the jury as follows in regard to defendant’s negligence:

“ It is for you to determine, under all the circumstances, surroundings, and conditions as they existed at and near the crossing, the buildings and other obstructions that you may find existed, the fact that the Pere Marquette Railroad was in close proximity, under all the facts in the case, whether the defendant railroad was exercising such ordinary and Reasonable care and caution as ordinary prudence would dictate in running its engine and tender, backing the same, in such close proximity to the freight train that had just passed Beach street, going.in the same direction and on the same track. If you find that the defendant railroad was not exercising such ordinary and reasonable care and caution in its conduct as ordinary prudence would dictate, then I charge you that the defendant railroad would "be guilty of negligence, and the plaintiff would be entitled to a judgment, if you find that such negligence of the railroad was the proximate cause of injury, provided you further find that Mr. Nixon was exercising such ordinary and reasonable care and caution as an ordinarily prudent man would exercise under the same circumstances, surroundings,' and conditions as you will find they appeared to him .at the time.
“ The court instructs the jury that the defendant was not required to have a flagman stationed on Beach street where the accident happened, and the plaintiff cannot recover in this case for failure to have a flagman stationed there.
“The court instructs the jury, from the evidence in this case, they must find that the speed of the train at the time of the accident did not exceed six miles an hour. In speaking of the train, that refers to the engine and tender. And the court further instructs the jury that six miles art hour was not an excessive rate of speed, and did not, as an isolated circumstance, constitute negligence on the part of the defendant.”

This was in effect allowing the jury to find that it was negligent for the defendant to permit its locomotive to> follow its train at so short a distance and time.

We have held in the case of Breckenfelder v. Railway Co., 79 Mich. 563 (44 N. W. 957), that we could not say ‘as a matter of law that one going upon a track immediately after a portion of a train had passed, without looking to see if it was closely followed by another car or cars, was guilty of contributory negligence; but it was for the jury to determine whethpr one injured under such circumstances could be said to have used ordinary care, and to be, therefore, free from contributory negligence. We are of the opinion that the same rule should be applied here; but it does not follow that the defendant was guilty of negligence from the mere fact of sending its engine immediately after its train. If it may use a locomotive to-push its trains over the grade, it must either couple it to-the train before it starts, or have the right to follow at a constantly diminishing distance until' it overtakes the-train. If we were to say it should couple only to a stationary train, the engine must follow the train ata short interval, unless we are to require delay, after the train stops;, and if we were to say that, it would not help the matter, for few persons would expect an engine or train to run up close to a stationary train. Safe railroading is often a matter of minutes, sometimes seconds, and it is not for juries or courts to determine what good or bad railroading requires, from their own notions, or from the fact that an accident has happened under certain conditions. It was not proper to say that the jury might find negligence from, the mere fact that the engine followed the train.

The judgment is reversed, and a new trial ordered.

Moore, O. J., Oarpenter and Montgomery, JJ., concurred with Hooker, J.

Grant, J.

, I concur in the result reached by my Brother Hooker. I think that upon this record there is no evidence of any negligence on the part of the defendant, and I think it is conclusively established that the deceased was guilty of contributory negligence.

For these reasons, and for the further reason that no-different state of facts can, in my judgment, be made to appear upon a new trial, I think none should be awarded.


source: Caselaw Access Project

author:
Carpenter, J. Grant, J.
      Hooker, J.

license: Public Domain

text:
    GRAND RAPIDS & INDIANA RAILWAY CO. v. CITY OF GRAND RAPIDS.
    1. Railroads — Taxation — Specific Taxes — Exemption from General Taxation.
    Under 2 Comp. Laws, § 6277, a parcel of land owned by a railroad and occupied by side tracks and a coal dock belonging to the road, the spades between the tracks being occasionally and necessarily used for the storage of bulky articles, is "actually used for railroad purposes,” and is exempt from general taxation.
    2. Same — Land Occupied by Individuals.
    Lands owned by a railroad, but in possession of private individuals, and used exclusively by them in their individual business for wood and coal yards and sheds and storage of grain, etc., are neither “actually occupied” by the railroad nor “necessary or in use in the proper operation” of the road within section 6277, 2 Comp. Laws, and are therefore properly taxable as other real estate under the general law. Grant and Hooker, JJ., dissenting.
    3. Taxation — Assessment—Description.
    A parcel of land described according to a plat, except parts used for the right of way of two named railroads, is sufficiently identified, there being a presumption that the rights of way are matter of record.

      4. Equity — Offer to do Equity.
    A landowner, seeking to enjoin the collection of a tax on real estate, cannot prevail on showing that a part of the tract is exempt, though such a showing would be sufficient at law; in order to be entitled to relief in equity he should do equity by paying or offering to pay that portion of the tax justly assessable to the unexempt part.
    Appeal from superior court of Grand Rapids; Newnham, J.
    Submitted January 15, 1904.
    (Docket No. 37.)
    Decided October 4, 1904.
    Bill by the Grand Rapids & Indiana Railway Company against the city of Grand Rapids and Marcus A. Frost, city treasurer, to enjoin the sale of certain land for the taxes of 1901. From a decree for complainant for a portion of said land, it appeals.
    Modified.

      T. J. O’Brien and James H. Campbell, for complainant.

      Moses Taggart, for defendants.
   Carpenter, J.

The object of this suit is to enjoin the sale of ten parcels of land for the, nonpayment .of taxes assessed thereon by the city in 1901. The trial court gave complainant relief as to parcels 8 and 9, but held it liable to pay either all or part of the taxes assessed against the other parcels. Complainant paid the taxes on parcels 4 and 6, and asks this court on this appeal to decree that it is not liable to pay taxes on the other parcels. The principal ground upon which complainant seeks relief is that the parcels of land in question are by law exempt from taxátion.

■ The larger part of parcels 1, 2, 3, 5, and 7 were, by the consent of complainant, in 1901, in the exclusive possession of private individuals, who used the same for their own business. Two wood and coal yards were located on parcel 2, one on parcel 1, one on parcel 7. A wood yard was located on parcel 3, a lumber yard on parcel 5. The business carried on at these yards by these various private individuals was apparently precisely what it would have been had their location been remote from the railroad. Most, if not all, of the merchandise bought by them came to them by rail over complainant’s railroad. Some of that sold by them — though in the case of the wood and coal this appears to have been very little — were shipped away over complainant’s railroad. But apparently they sold, and had a right to sell, merchandise to any one who would buy. The estates of these private individuals granted by the railroad company were not in form permanent. The record does not show what rights the owner of the wood yard on parcel 3 had. Complainant gave no express permission for the occupancy of parcel 5 for a lumber yard. But we are bound to decide-that that permission was implied. The occupation of parcels 1, 2, and 3 for coal and wood yards was under an express agreement called a “permission and license.” The record contains the agreements by which parcels 2 and 7 are occupied. . The occupant was to pay no rent; to remove the buildings by him erected, and to vacate the property, in one case in 60 and in the other in 30 days after notice. The occupants of parcel 2 agreed to pay the taxes on the property, if any were assessed. On parcel 1 there was also situated an elevator owned and controlled by the Brown Milling Company. This building was erected under a written permission made in 1888, similar to the writing above described, except that there was no provision for the payment of taxes. The writing specifies that the building “shall be used for the purpose of a grain elevator and warehouse.” There is no provision in the writing that the business of a public warehouseman shall be carried on, and there is nothing to indicate that the business that was actually carried on was in any sense a public business. On the contrary, it is to be inferred that the occupant used the same exclusively for storing and shipping the grain purchased or shipped in by itself.

Though the estate of these occupants is called a license, it was, in a legal sense, more than a license. See Morrill v. Mackman, 24 Mich. 279 (9 Am. Rep. 124). It had many of the characteristics of an estate at will. See 1 Washburn on Real Property (6th Ed.), §§ 762-796. While it was terminable at will, it might last for a long .period, and as a matter of fact at the time the assessment was made parcel 7 had been occupied under the agreement above described for 19 years.

Parcel 10 was in the form of a parallelogram, 800 feet in length north and south, and 350 to 400 feet in width east and west. A short distance from its eastern boundary was a side track. On the western 85 feet of the tract were four side tracks and a coal dock belonging to complainant. About midway between the tracks on the western side and the side track on the eastern side was another track — a stub track — which extended south about 100 feet from the northern line of this tract. All these side tracks were used by complainant as occasion demanded. While it is evident that when the assessor placed this tract upon the assessment roll he found it vacant, we are nevertheless satisfied from the testimony of complainant that the spaces between these various tracks were occasionally used, and necessarily used, for the storage, of bulky articles; e. g., xailroad material of various kinds and sewer pipe. This does not mean that every foot of space on this tract was actually used for storage purposes. The space was used for that purpose as occasion demanded, and we are bound to say that such use was occasionally demanded.

Was this property subject to taxation like other real estate ? This depends upon the proper construction of the following part of section 6277 of the Compiled Laws of 1897:

“The taxes so paid [the specific tax] shall be in lieu of all other taxes upon the properties of such companies, except such real estate as is owned and can be conveyed by such corporations under the laws of this State, and not actually occupied in the exercise of its franchises, and not necessary or in use in the proper operation of its road, but such real-estate so accepted [obviously this should be “ excepted”] shall be liable to taxation in the same manner, and for the same purposes, and to the same extent, and subject to the same conditions and limitations as to the collection and return of taxes thereon, as in other real estate in the several townships or municipalities within which the same maybe situated.”

I agree with my Brothers Gbant and Hookeb that under this section parcel 10 is not liable to general taxation.

Are the other parcels liable to such taxation ?

As shown by the foregoing statement, the greater portion of parcels 1, 2, 8, 5, and 7 are, by the consent of complainant, in the exclusive possession of private individuals, and exclusively used by them for their individual business. In the case of the elevator, that business is the purchasing and storing of grain. In the case of the wood and coal yards, that business is the sale of coal and wood. In such business complainant could not lawfully engage. When, by the consent of a railway company, its land is exclusively devoted to a business in which it cannot lawfully en-' gage — a business foreign to the purpose of its organization —such land is not, in my judgment, “actually occupied” by it, and is “not necessary or in use in the proper operation of its road,” and is, therefore, under the statute above' quoted, taxable “like other real estate in the several townships or municipalities in which the same may be situated.”

It is true that there is a relation between complainant’s business and the business carried on uppn this land. That relation arises from the fact that complainant transported the coal, wood, and lumber sold on these several parcels, and will transport or has transported the grain purchased and stored in the elevator. If this relation affords a ground for exemption, I think we must say that all lands of a railway company used for the storage, purchase, manufacture, or sale of goods which have been or are to be carried by it are exempt from taxation. If so, land of a railway company occupied by a grocery store for the sale of groceries carried by it, land occupied by a dry goods store for the sale of dry goods carried by it, land occupied by a clothing store for the sale of clothing carried by it, and land occupied by a saloon for the sale of liquors carried by it are all exempt from taxation. And I cannot see why, by the same reasoning, the buildings on said land and the goods stored, purchased, manufactured, or sold thereon are not also exempt. The principle which leads to such consequences cannot, in my judgment, be sound. I think, therefore, that the parts of parcels 1, 2, 3, 5, and 7 which were exclusively in the possession of private individuals, and exclusively used by them for their individual business, were liable to taxation like other real estate. This conclusion is supported by authority.

Under a charter which provided “that no other or further tax or imposition [than the specific tax therein, provided] shall be levied or imposed upon the said company,” it was held by the supreme court of New Jersey that docks of a railway company leased for lumber yards, for which rent or equivalent compensation was paid, were liable to general taxation. See State v. Newark, 25 N. J. Law, 315. The judgment in that case was affirmed by the court of errors and appeals. See Id., 26 N. J. Law, 519.

Under a similar provision in a charter it was held by the last-named court that property leased by a railway company for a coal yard was liable to general taxation. See Cook v. State, 33 N. J. Law, 474

It appears from the case last cited that the test of tax-ability was the profit derived from renting the land. While I do not think this is the test under our statute, which, as already indicated, differs from the New Jersey statute, still, if that test were applied, it would not, in my judgment, help complainant. For while it appears that those who used the land in question paid no rent, it does appear that as a consequence of that occupancy the railway company materially augmented its earnings by carrying their freight. Complainant did, therefore, receive compensation for the occupancy.

The decisions of our own and other States (see Detroit, etc., Station Co. v. City of Detroit, 88 Mich. 347 [50 N. W. 302]; Pennsylvania R. Co. v. Mayor, etc., of Jersey City, 49 N. J. Law, 540 [9 Atl. 782, 60 Am. Rep. 648]; Chicago, etc., R. Co. v. Bayfield Co., 87 Wis. 188 [58 N. W. 245]) which hold that elevators erected for the purpose of facilitating the loading and unloading of grain carried by railways are not liable to taxation clearly have no application to the land exclusively used by private individuals for the business of conducting coal or wood yards, as appears from the following quotation from the opinion in Detroit, etc., Station Co. v. City of Detroit, supra:

“ This elevator is as essential and necessary to the complainant in the handling of its grain as is its depot for the use of passengers, or its freight depot for the handling of the general merchandise it carries. ”

Neither do these decisions apply to the land occupied by the Brown elevator. Those decisions are authority for the proposition that, elevators which railroad companies are empowered to erect and operate are not liable to general taxation. Railway companies have not, as had the complainant station company in Detroit, etc., Station Co. v. City of Detroit, supra, any express authority to own and operate an elevator. They undoubtedly do have an implied authority to erect any elevator which enables them to better perform their obligation as common carriers of grain. It is obvious that such elevators — like the elevator in question in Detroit, etc., Station Co. v. City of Detroit, supra, and in the other cases last cited — afford equal advantages to all shippers. They are not, like the elevator in the case at bar, devoted to the exclusive use of a single person engaged in the business — a business which complainant itself could not carry on — of purchasing and shipping such grain.

The distinction between the business of running an elevator to facilitate the carriage of grain and of running it as a public warehouse for the storage of grain has been made. See Milwaukee, etc., R. Co. v. City of Milwaukee, 34 Wis. 371; In re Swigert, 119 Ill. 83 (6 N. E. 469). And it is held that the first class of elevators are not liable to taxation, and that the second are. It is apparent that these authorities go much further than it is necessary to go to justify the conclusion that the land occupied by the elevator in question is liable to taxation.

It is contended that our own decision of Auditor General v. Railroad Co., 114 Mich. 682 (72 N. W. 992), is opposed to this decision. In that case the auditor general undertook to sell a part of the terminals and depot grounds of the railroad company situated in Bay City. It was held by this court that this could not be done, even though it appeared that two lumber firms “also occupied a part of the docks.” I think it may be inferred from the record in that case, as pointed out in the opinion of my Brother Hooker, that certain portions of the land assessed were in the exclusive occupancy of these lumber firms who used the same for carrying on their individual business of running a lumber yard. The contention that these portions of the land were taxable because they' were used exclusively for a business foreign to that of a railway company does not seem to have been presented to the court, or considered by it. And, if it had been, it would not have affected the decision. Had such a contention been made, the court could have answered it by saying the State has no power to sell this entire description of land, most of which is exempt from taxation, because a portion of it is not exempt. See Osborn v. Railroad Co., 40 Conn. 498. In my judgment, therefore, Auditor General v. Railroad Co., supra, is not opposed to the views stated in this opinion.

It is said that, as the State has once taxed these earnings, it is unjust for it to also tax the land the use of which contributed to augment them. This charge of injustice is not well founded. It is true that, except for their arrangement with'complainant, the lumber dealers and coal dealers who occupied its land would not have shipped their lumber and coal over complainant’s road; but either they or other dealers who supplied the city of Grand • Rapids would in that event have shipped it over other railroads. The earnings of railroads liable to State taxation were therefore entirely unaffected by the arrangement between complainant and the occupants of its land. The truth is that complainant, by granting to these lumber and coal dealers a special privilege, viz., the privilege of occupying its land without paying rent, which gives such dealers an advantage over their competitors, has been enabled to obtain the carriage of their freight, which otherwise would have been carried by its competitors. In" other words, the railway company, by giving the lumber and coal dealers an advantage over their - competitors, obtains an advantage over its competitors. If this arrangement is proper, it is beneficial only to the lumber and coal dealers and to complainant. It in no way inures to the benefit of the public, and therefore-does not entitle complainant to any public consideration.

Neither is it true that the arrangement for the occupancy of these parcels of land was beneficial to the city because it resulted in the erection of buildings which are subject to taxation. It must be assumed that, if this arrangement had not been made, these buildings would have been erected in some other part of the city, where they would have also been subjected to taxation. It was, therefore, a matter of indifference to the city where they were erected. Nor would these buildings have escaped taxation if the railroad company had itself erected them. It is true that, if it had used them for some legitimate railway purpose, they would have been exempt; but, if they had been used as these were, it is clear that under the reasoning of this opinion they would not have been. We do not hold these parcels of land liable to taxation simply because of the use to which they are put, but because that use proves that the land is “not actually occupied ” by complainant, and is “not necessary or in use in the proper operation of its road.” And the statute (Section 6277, 2 Comp. Laws) in express terms makes all land of this description liable to taxation. See City of St. Paul v. Railway Co., 39 Minn. 112 (38 N. W. 925); Milwaukee, etc., R. Co. v. City of Milwaukee, supra.

Complainant, as additional grounds for relief, contends .-

(a) That the description of the third parcel is fatally defective.

(b) The assessment of the first, second, and third parcels is void because included in one description, and under one valuation, are distinct parcels owned by complainant and the Michigan Central Railroad Company.

(c) - Included in every description are parts which are certainly exempt.

The ground upon which it is claimed that the third description is defective is that there is no means of knowing what is described by this exception: “Also except part used for G. R. & I. and M. C. R. R. Company’s right of way.” The right of way of the Grand Rapids & Indiana Railway Company is shown by a deed made in 1870 and duly recorded. There is nothing to indicate, and it should not be presumed, that the right of way of the Michigan Central Railroad Company is not also shown by a similar recorded deed. We cannot say, therefore, that the description was not good under our decision in Harts v. City of Mackinac Island, 131 Mich. 680 (92 N. W. 351).

The other objections, if valid, would prevail if they were asserted in a suit at law or as a defense to a suit to enforce the tax. See Auditor General v. Railroad Co., 114 Mich. 682 (72 N. W. 992). But here complainant is seeking relief in a court of equity. Part — the greater part — of these parcels of land is justly liable to taxation. Equitably complainant should pay the proportionate tax justly assessable against such part. It never offered to pay, and now objects to paying, that. Complainant seeks to be relieved from the entire burden of taxation, part of which, equitably, it ought to bear. It seeks equity, but declines and has declined to do what is equitable. Nor has it presented to us a record which enables us to make any just correction in the decree appealed from — a decree which relieved complainant from the payment of part of the taxes under consideration. Under these circumstances the objections under consideration do not entitle complainant to relief. See Palmer v. Township of Napoleon, 16 Mich. 176; Merrill v. Auditor General, 24 Mich. 170; Conway v. Waverly Township Board, 15 Mich. 257; Tisdale v. Auditor General, 85 Mich. 261 (48 N. W. 568).

It follows that, in my judgment, complainant is entitled to a decree enjoining the sale of parcel 10, and that the decree appealed from so far as it relates to the other parcels should be affirmed. Complainant will have costs in this court.

Moore, C. J., and Montgomery, J., concurred with Carpenter, J.

Grant, J.

(dissenting). The object of this bill is to enjoin the sale of ten parcels of land owned by the complainant in the city of Grand Rapids for general city taxes for 1901. The principal claim of the complainant is that these parcels of land were actually occupied in its legitimate business and use, and were exempt from local taxation under 2 Comp. Laws, § 6277. A somewhat full statement is essential to a clear understanding and determination of the question. The southern terminus of the complainant’s road is at Richmond, Ind. It extends from that city north through the entire Lower Peninsula of Michigan to Mackinaw City, passing through the defendant city. Grand Rapids is the largest and most important point on the road, which is. divided into two divisions; that city being the dividing point and also being the division headquarters. There is a large passenger and freight business in and out of the city. For the purpose ■of carrying on its business it has obtained considerable land through the city from the southern to the northern limits. It has a large passenger and two freight depots, a large yard and grounds for delivering and receiving-freight along its tracks. In running north its tracks cross Hall street, Fifth, Fourth, Third, Second, and First avenues in the order named. It has extensive railroad shops and a roundhouse located on the west side of the main track between Hall'street and Fifth avenue. Its yard extends from a line south of Hall street to Fifth avenue* and some of the tracks extend north of Fifth avenue.. But for the streets intervening, the land involved would be one parcel. Parcel 10 lies south of Fifth avenue,’ and is about 800 feet north and south and about 350 feet east and west. Immediately at the south of this strip are the roundhouse and construction and repair shops of complainant. Parcel 1 lies between Fifth and Fourth avenues. The south line of this parcel extends from its main track west to Hilton street, thence north 10 rods, thence east 150 feet, and thence north to Fourth avenue, parallel to Hilton street. This line extends as far north as Second avenue, and is the west line of complainant’s land, which gradually narrows as it approaches Second avenue. The second parcel lies between Fourth and Third avenues, the third parcel between Third and Second avenues, and the fifth — a strip about 50 feet wide — between Second and First avenues, and is described as the east 50 feet of lots 2, 3, 4, and 5 in block 14. The east boundary line of the above parcels is the west line of the right of way of the main track. The seventh parcel lies about a half mile farther north, and is a strip 70 feet wide, along the east side of Ottawa street between Island and Fulton streets. It is the west 70 feet of lots 2, 4, 6, 8, 10, and 12 on South Ottawa street. It is just north of the train shed and freight house. West of the center line of this block stands the brick freight house fronting on Fulton street. Upon this parcel is a coal yard and a track inside of it. There is only one track within that 70 feet, but there are four tracks on the same lots adjoining. ’They are used for delivering coal, and for reaching the freight house, and in loading and unloading cars at the freight house. At the north end these tracks connect with the main track at Market street. The coal shed covers a space of about 40 by 125 feet on the southwest corner of the 70 feet. The rest of the lot is a coal yard. That company uses all of the west 70 feet of these six lots that is not occupied by the railroad company. All the coal that comes to them is brought over the Grand Rapids &c Indiana tracks. There is a driveway 12 to 15 feet wide along the west side of the track from which the Bennett Company unloads and loads its freight. This driveway is used by others if occasion requires. The above are the only descriptions now in dispute.

Complainant’s coal docks are situated on the west side of the tenth parcel. These docks are used exclusively for its own use in storing coal and coaling engines. The cars are run upon a trestle for dumping into the coal bunkers. There are in all seven tracks upon this parcel — one upon the east, called the “caboose track,” used for storing cabooses and sometimes other cars, and a track called the “Porter track,” running from the north about 200 feet south of Fifth avenue, used for loading and unloading cars. Teams drive there for the purpose of loading and unloading. Coal, wood, and lumber are unloaded there, and cars are loaded for shipment out. The space between the east and west tracks is used for depositing material such as is required for use in its shops. This parcel of land, or the greater portion of it, was assessed in the year 1900. In a decree dated March 6, 1901, in the usual suit brought by the auditor general for the foreclosure of tax liens, it was held that this land was exempt under the statute above cited. There was no change in the situation between that and the following year. Two or more tracks in legitimate use for freight purposes are located upon parcels 1, 2, 3, and 5. Two lumber dealers, who ship in and out large amounts of lumber, unload their cars and pile their lumber along the tracks upon parcel 5. There is no arrangement between these parties and the complainant in regard to the use of this land. It appears to be to the interests of all parties, as well as to the public, to leave this lumber there for sale and for reshipment. The Bennett Ice & Fuel Company occupies the west 60 feet of the seventh parcel under a written license made May 26, 1883. This license permits the Bennett Company to .erect sheds for the purpose of loading and unloading coal and wood and shipping the same, and for no other purpose. No rent is charged. The sheds are to be removed whenever the company desires, upon 30 days’ notice. Either party can at any time terminate the agreement, in which case the Bennett Company is to remove the sheds at its own expense. On the southwest corner of parcel 1 is located an elevator owned by one Brown, and erected under a written license February 27, 1888. By this agreement Mr. Brown was permitted to erect a building at this place at his own expense, to be used for the purpose of a grain elevator and a warehouse, and not to be rented or let to any other party without the written consent of the railroad company. On parcel 2 a similar license was given by complainant to Hulst & Van Heulen on July 16, 1900, giving them the right to use a piece of land described by metes and bounds, and containing 23,430 square feet, for the purpose of erecting a building to be used for a coal and wood yard, and for no other purpose. A similar license, dated October 2, 1900, was also granted to the South G-rand Rapids Ice & Coal Company, containing an area of 21,615 square feet, to be used for the same purpose as that granted to Hulst & Van Heulen. A track runs through the center of this parcel north and south, from which Hulst & Van Heulen and the ice and coal .company receive and ship their freight.

The statute taxing railroads in 1901 provided that on all gross income not exceeding $2,000 per mile railroads should pay 2|- per cent, on such gross income; upon that in excess of $2,000 and not exceeding $4,000 per mile, Si per cent.; on all in excess of $4,000 and not exceeding $6,000 per mile, 4 per cent., etc. The statute then provided:

“The taxes so paid shall be in lieu of all other taxes upon the properties of such companies, except such real estate as is owned and can be conveyed by such corporations under the laws of this State, and not actually occupied in the exercise of its franchises, and not necessary or in use in the proper operation of its road, biit such real estate so accepted [excepted] shall be liable to taxation in the same manner and for the same purposes and to the same extent and subject to the same conditions and limitations as to the collection and return of taxes thereon as is other real estate in the several townships or’municipalities within which the same may be situated.” 2 Comp. Laws, § 6277.

If these lands are in actual present use for railroad purposes, they are exempt from further taxation, having already paid the tax under the law above cited. If they are not so used, but are held for future use, or for the accommodation of private parties, then they are subject to taxation.

An elevator built by a railroad company for the purpose of storing grain for hire after its liability as a common carrier has ceased is not exempt from taxation. Milwaukee, etc., R. Co. v. City of Milwaukee, 34 Wis. 271.

An elevator erected by a railroad company at a terminus of the road and used for transshipping grain and relieving cars of their lading, the grain remaining in the elevator until called for by the consignee, and a charge made if permitted to remain over 10 days, was held a necessary part of its equipment, and not subject to táxation. Pennsylvania R. Co. v. Mayor, etc., of Jersey City, 49 N. J. Law, 540 (9 Atl. 782, 60 Am. Rep. 648). See, also, In re Swigert, 119 Ill. 83 (6 N. E. 469).

A railroad company may lease its wharves and docks when not in use by it, and charge wharfage therefor, without being subject to taxation, provided that the use by the lessee is subordinate to the use of the railroad company. Osborn v. Railroad Co., 40 Conn. 498.

An elevator situated 900 feet from the right of way of a railroad company, together with 20 acres on which it was located, and the spur track there, is held exempt. State v. Railway Co., 86 Tenn. 438 (6 S. W. 880).

It is said in Milwaukee, etc., R. Co. v. Supervisors of Crawford Co., 29 Wis. 116, that provisions of this character should receive a fair and liberal construction in favor of the company, because they are not exempt from, taxation, but are required to pay their share of the public burdens by another method. If the grounds, buildings, and tracks are reasonably suitable and proper, and are in use for the furtherance of the business of the railroad company, they are exempt from other methods of taxation.

We held in Auditor General v. Railroad Co., 114 Mich. 682 (72 N. W. 992), that where two lumber firms, occupy a part of the docks, but paid no rent, and it was a convenience to the company in shipping lumber over its, road, and the entire lumber was so shipped, and the land was constantly used in shipping freight, it was not subject to general taxation.

This court held that an elevator used as a warehouse in connection with its regular business as a common carrier was not subject to a general tax. Detroit, etc., Station Co. v. City of Detroit, 88 Mich. 347 (50 N. W. 302).

Parcel 10, with its seven tracks, used for storing cabooses, coal, receiving and discharging freight, coaling engines, running its cars to its repair shops situated close to the south end of the parcel, and receiving material for its shops, is exempt. The circuit court for the county of Kent in chancery so held as to the tax of 1900 in a decree brought by the auditor general to foreclose lands delinquent for taxes. The condition was the same in 1901 as in 1900. Whether that decree is res adjudicata depends upon whether the city was party or privy to that suit. It is unnecessary to determine this question, inasmuch as we hold that the decree was right.

The fact that the complainant permitted the Bennett Company and other parties to erect buildings upon its land in which to receive and send out freight is in furtherance of the convenience of both carrier and shipper, and, we may fairly conclude, for the benefit of the general public. Because, the better the facilities for receiving and shipping, the less the cost. The Bennett Company pays annually about $30,000 to the complainant for carrying its merchandise, consisting mainly of coal, bulky and requiring temporary storage. Upon this amount it has already paid a tax. If the company owned these shops, and there discharged its freight to be delivered and received by the consignee, this would certainly be a legitimate use for the purposes of the company. It is no less the legitimate use because a party doing an immense business is permitted to erect its own sheds in which to receive the freight. These buildings are the personal property of the Bennett Company, and are subject to taxation. The parties, for their own convenience and that of the railroad company, have erected them, and they evidently facilitate the business of both. The Bennett Company has not the control of the track. This is under the control of the complainant, and when not in use in loading or unloading freight for the company can be and is used in handling freight for the other parties. The same is true of all the tracks. It is certainly a legitimate use of its land to run a side track thereon for the purpose of loading and unloading lumber. It does not make that use illegitimate, within the meaning of the law, because the parties are permitted to pile their lumber upon the. land near by, awaiting delivery or reshipment. All these tracks and buildings are used solely for receiving and transporting' freight. The complainant makes no charge for their use. The traffic at this point is large, and, we think, comes fairly and honestly within the legitimate use of the railroad company, so as te exempt it from general taxation under the statute.

Decree should be reversed, and decree entered here for complainant, with costs of both courts.

Hooker, J.

(dissenting). Complainant’s bill was filed to restrain the city of Grand Rapids from collecting a tax levied upon several parcels of land, all of which were covered by tracks of the complainant’s railroad. As the law now stands, similar questions cannot hereafter arise, complainant’s claim being based on the law in force in 1901, which imposed a specific tax of per cent, upon the gross earnings of railroads, and relieved their property from other taxation, except such property as they should not actually occupy in the exercise of their franchises, and was not necessary or in use in the proper operation of the roads. While the land in controversy is described as separate and distinct parcels, such parcels are contiguous to each other, except as they are separated by city streets, and they are all within the yard of the company at Grand Rapids; and, as we view the testimony, all were used, in whole or in part, for railroad purposes, such as switching and storing cars, loading, unloading, and storing freight, etc. Upon some of the parcels there were wedge-shaped pieces between tracks, and strips of land of greater or less width outside of the tracks, which the defendant claims were either not used at all or were given over to the private use of individuals under leases or licenses, for the storage of wood, coal, and lumber.

As to the former- of these classes, we are of the opinion that the wedge-shaped and other parcels, if not used for tracks, or not occupied by cars or other property of the railroad, or used for the loading or unloading of freight, were nevertheless in use for railroad purposes. They were so located as to be comparatively, if not wholly, useless for any other purposes, and the safety of trains is promoted by an absence of crowding and by the increased advantages of vision which open spaces afford.

The authorities have been liberal in construing the law where railroads have not used land contiguous to their tracks for purposes foreign to railroad business. It is a fact well known that there are miles of right of way in the country crossed by but a single track. It has never been proposed to subject any part of this to local taxation upon the ground that it is not in use for Railroad purposes, or is a provision for future use. The strip of land in dispute in this case is two or three or four times as wide, but the requirements of the company, and the business done over it, are proportionately much larger than that done over country tracks. Weave of the opinion that the land appropriated by the complainant is not unreasonable in, amount, and that it was not subject to local assessment upon the ground that it was not used for railroad purposes, except such parts thereof as were appropriated to other uses, if there were any such.

The evidence shows that portions of this yard were devoted to the loading and unloading and storing of freight. We understand that defendant does not claim that land used for the loading or unloading of freight, to be drawn away immediately, is not used in connection with the business of the railroad. We are not sure that it would be claimed that such use would not properly include temporary storage of heavy and bulky commodities upon the ground or in sheds erected by the company for the purpose. At all events, we understand it to be a common and proper practice for railroads to store freight in depots and warehouses until called for, and that the practice is well within the proper management of their business, and in fact could not be safely omitted; and we know of no reason why the rule does not include grain, wood, coal, and lumber. These are bulky articles, and it is important that they be not subjected to the necessity of repeated drayage. It is the general practice for dealers in such commodities to deliver them to the consumer from the car where practicable, and otherwise store them where unloaded from the car until sold. Some dealers own or rent their sheds or yards, and induce the railroads to run sidings to them. In the present case the railroad appears to have been willing to allow such storage upon its land adjacent to its sidings.

The evidence shows that upon one of these parcels the complainant has permitted one Brown to erect a building to be used as a grain elevator. Upon other portions different persons have been assigned specific places for the unloading, loading, and storing of wood, coal, and lumber brought in or to be shipped out upon complainant’s cars or over its road. Written authority has been given in some cases, in others verbal; but it is our understanding that in no case is such authority more than a license, and in no case is rent reserved or paid. If this is such a use as to bring these parcels within the exception of the statute, the complainant must fail; but if it is a proper and legitimate use of the land for the purposes of complainant’s business, its complaint should be sustained.

The statute in question need not necessarily be called a statute of exemption to be strictly and technically construed against the complainant. It provides a tax by appropriating a percentage of complainant’s gross income, and, instead of saying that it shall be exempt from other taxes, says that this specific burden shall be in lieu of all other taxes. Which method would be productive of the greater revenue may be an open question. Certainly there is no presumption against the specific tax. A reasonable construction would seem to be that the legislature proposed to apply the specific tax to all productive property of railroads where used for railroad purposes, but not to allow them to escape taxation upon property that they did not see fit to use at all, or to devote to other and perhaps less productive purposes. See Kimball v. Milford, 54 N. H. 406; Gardner v. State, 21 N. J. Law, 560.

In City of St. Paul v. Railway Co., 39 Minn. 112 (38 N. W. 925), it was said:

“ These charters do not exempt the property from taxes, but provide a substituted method of taxation, based upon the assumption that the property of the companies will be used for railroad purposes, and thereby an income be derived, the percentage of which received by the State will be equivalent in its results to taxation of the property.” Citing County of Ramsey v. Railway Co., 33 Minn. 537 (24 N. W. 313).

In Milwaukee, etc., R. Co. v. Supervisors of Crawford Co., 29 Wis. 123, it was said:

“ The payment of this sum into the State treasury, and which is called ‘license money,’ must, in the light of past legislation upon the subject, be regarded as, in the judgment of the legislature, an equivalent for the taxes which those companies would otherwise be required to pay if assessed and taxed according to the ordinary method prescribed by law. A strict construction of the statute, therefore, against the company, or a liberal one in favor of the public, can, with difficulty, be justified in view of what seems to have been the legislative intent, and it would seem that little or no effect can be given to the rule. We are at liberty, therefore, and, indeed, required, to give the statute a fair and liberal construction in favor of the company, or such an one as it should receive supposing there is no injustice in the claim made by the company, or advantage to he gained by it over the public or taxpaying community generally in avoiding the taxation complained of.”

If we were without authority upon this subject, and the case were therefore one to he decided upon “first impression,” justice would require that weight be given to the effect of such use. Manifestly, the earnings from freight handled for these persons in connection with their use of said parcels furnish revenue to the State; and, if the lands are also to be taxed, the public obtains additional revenue, although the use of the land has been directly instrumental in producing taxable revenue for the company, in the exact way that the statute contemplates, and not through uses foreign to the railroad purpose.

Mr. Justice Grant has alluded to several cases where elevators owned and operated by railroads have been held to be structures properly connected with the railroad business. We may take judicial notice that nearly all the grain of the country is the subject of shipment, and, as has been often said, the facilities for loading afforded by an elevator are as appropriate to the loading of grain as derricks or trucks are for loading heavy freight.

In Pennsylvania R. Co. v. Mayor, etc., of Jersey City, 49 N. J. Law, 540 (9 Atl. 782, 60 Am. Rep. 648), it was held that a grain elevator bnilt by the road, and used, for storing and transshipping grain, was used for railway purposes, and not taxable locally. It was there said:

“ It appears in the evidence that the elevator is used for transshipping grain and relieving cars of their lading. The elevator does by machinery what was before done by hand, and appears to be one of the necessary terminal facilities of a railroad engaged in the transportation of large quantities of grain. It further appears that the grain passing through this elevator, if not called for by the consignee, is retained there, and if it remains in store for over ten days a charge is made of one-quarter of a cent per bushel for each ten days thereafter. Before the elevator was built, grain was sometimes detained in the cars, and when so detained a demurrage charge of $5 or 110 a day per car, or two cents per bushel, was paid by the consignee. Other trunk lines to the west had erected elevators prior to the erection of the one in question. They are used as freight houses for grain, and seem to be as indispensable to the railroads in handling the immense quantity of grain which they carry as any other freight houses used for the reception or unloading of merchandise transported. If grain was allowed to remain in the elevator until called for without charge, it would unquestionably be an appliance for railroad purposes. The fact that a small penalty is added to the freight charge to induce shippers to remove their grain within a reasonable time does not withdraw this structure from that class of improvements which are necessary for railroad uses, within the meaning of that term as construed in State v. Hancock, 35 N. J. Law, 537.”

A similar case will be found in State v. Railway Co., 86 Tenn. 438 (6 S. W. 880). See, also, In re Swigert, 119 Ill. 83 (6 N. E. 469), and Gilkerson v. Brown, 61 Ill. 486.

The question is settled in this State where the Union Depot Company owns and operates the elevator, by the case of Detroit, etc., Station Co. v. City of Detroit, 88 Mich. 347 (50 N. W. 302).

In the present case the complainant did not own the elevator, and therefore derived no profit from the storage or handling of grain. It allowed another to erect an elevator upon its grounds, thereby obtaining the usual facilities for loading grain without cost to itself. This elevator was subject to taxation to the person owning it, as was held in the case of Gilherson v. Brown, 61 Ill. 486, and, so far as the land was concerned, it was devoted to railway purposes as fully as though the company had owned and managed the structure. So the coal sheds erected by dealers would be subject to local taxation. Thus, in both instances, the city would profit by such practice, for, if the elevator or sheds were erected and controlled by the railroad company, they would not be subject to local taxation.

Stress is laid upon the claim that the owners of the elevator and those who owned the coal, wood, and lumber were allowed to use the land for their own private purposes, and it is argued that this is controlling. We should not feel justified in holding that a railroad company might escape local taxation upon lands leased by it to others and devoted to manufacturing or mercantile purposes ; but neither does it seem reasonable that land in its yards, which is in daily use for the unloading of freight from its cars, is to be taxed merely because the company permits its use for temporary storage until the property-can be transshipped or sold and delivered about town, or because, in the economical conduct of its business, it sets aside given portions for large shippers who manage their business from there. Great abuses of such privileges do not necessarily follow. Each case must rest ,upon its own facts, and evasions can be detected and excepted from the application of the rule.

The case of Auditor General v. Railroad, 114 Mich. 682 (72 N. W. 992), is in point upon this case. In that case the railroad company owned a piece of land in Bay City, near the river, and a dock. The company was said to have used that land constantly in “originating [whatever that may mean] and shipping freight.” The uncontradicted proof shows that the land was occupied by two lumber firms; i. e., “lumber dealers,” who “had lumber yards upon it,” and were in the habit of shipping such lumber as they shipped by rail over the company’s road. There was also a fish house on the dock, used by Tromper & Co. for preparing fish for shipment over the road. No rent was paid. The inference to be drawn from the record is that all of these persons were licensees, in exclusive occupancy of certain portions of the land for the purposes mentioned. It was held that such holding was a convenience to the railroad company, and that the land was not subject to local taxation. "

The present case seems to be clearly within the principle laid down in the two Michigan cases cited. I concur in the opinion and conclusion reached by Mr. Justice Grant.


author: Moore, C. J.

text:
    CRAWFORD v. STEEL.
    1. Statute of Frauds — Transfer of Note.
    An oral promise by the indorser of a note held by a bank that he would deposit its value to the credit of the bank with its New York correspondent if the bank would send the note to him, is void under the statute of frauds, in the absence of proof of an actual delivery of the note in pursuance thereof.
    2. Bills and Notes — Fraud—Banks.
    The director of a bank conspired with the cashier to deliver,to the director a note on which he was indorser, and to carry a fictitious credit entry on the bank’s books for its value until after the note had become uncollectible, and then fraudulently connived with the cashier to return the note to the bank without the knowledge or authority of its officers, by reason of which the bank was prevented from collecting the note during the time it was withdrawn when it was collectible. Held, that recovery against the director of the full amount of the note could not be had by reason of the fraud without proof that at the time the alleged agreement was made the note was collectible, and that when it again appeared in the files of the bank it was worthless.

      Error to Clinton; Stone, J.
    Submitted February 24, 1904.
    (Docket No. 102.)
    Decided October 4, 1904.
    Assumpsit by James B. Crawford and others against George A. Steel for money had and received. There was judgment for plaintiffs, and defendant brings error.
    Reversed.

      H. E. & E. L. Wálbridge (H. Geer, of counsel), for appellant.

      Lyon & Moinet, for appellees.
   Moore, C. J.

This case was tried before a jury. There was judgment in favor of plaintiffs, and defendant has brought the case here by writ of error. Plaintiffs’ declaration consists of three special counts and the common counts.

The first count alleges1 that on August 31, 1895, the First National Bank of Ithaca, Michigan, was a national bank doing business at Ithaca; that it was the owner of a note of $2,817.55, dated June 13, 1895, made by the Whipple Harrow Company, payable to the order of R. M. Steel, and bearing his indorsement, and guaranty of payment by George A. Steel, attorney, and made payable to M. F. Chafey, cashier, or order, said Chafey being the cashier of the bank; that the note was then and there of value, to wit, its face and accrued interest; that on August 31, 1895, George A. Steel, at Ithaca, requested and directed the bank to send said note to him at St. Johns, and promised and agreed that, if the bank would send the note to him, he would place $3,000 to the credit of said bank at the National bank of the Republic of New York, its correspondent in that city; that the First National Bank of Ithaca, Telying upon defendant’s promise, sent and delivered the note to him; that defendant did not place any money to the credit of the bank, as promised, and did not pay the money, or any part thereof, to the bank; that on July 1, 1896, George Reed was duly appointed receiver of said First National Bank of Ithaca, and qualified and entered upon his duties as such receiver; that while so acting as. .receiver on July 30, 1901, said bank and said receiver, being thereunto duly authorized, duly assigned to plaintiffs all of its and his right and interest in and to the claim and demand of said bank against defendant on account of the premises.

The second count alleges the existence of the First National Bank of Ithaca, as stated; its ownership and possession of the note, as stated; that the note was then and there of value; that on August 31, 1895, defendant was a director of said bank, and, while exercising the rights and privileges, and under the obligations and duties of his said office, and assisting in and about the management of the affairs of the bank, he promised the bank that if it would send him said note he would place said sum of money to its credit, as stated; that the-bank then and there sent the note to defendant in accordance with his request; that defendant, contriving to injure the bank, did not place the money to its credit, as promised, and did not pay the money to the bank, but received and retained the note, and fraudulently connived with the cashier, Chafey, and induced and persuaded him to place and carry upon the books of the bank a fictitious entry of a pretended deposit, credit, and payment of $3,000 as made by defendant at the National Bank of the Republic for and in behalf of the Ithaca bank; that said defendant caused said fictitious credit to be continued upon the books of the Ithaca bank until July 11, 1896, when he fraudulently connived with the cashier to return the note to the bank, and place it among the papers of the bank, without the knowledge of the bank or the authority of its officers ; that defendant thereby deprived and prevented the bank from taking the usual and proper steps for the collection of the note during the time it was out of the bank; that, if defendant had not connived with said cashier, and withdrawn and retained said note from the bank during the time stated, it would have been collected; that the note, when returned to the bank, was uncollectible and worthless ; that by such fraudulent conduct defendant produced and inflicted an injury to and upon the bank, and defrauded it of its property and rights, for which an action on the case for fraud or deceit might then and there have been brought; that by reason of the statute in such case made and provided (3 Comp. Laws, § 10421), defendant then and there promised the bank to pay all just damages arising from such fraud and deceit; that George Reed was duly appointed receiver of said First National Bank of Ithaca, and qualified and entered upon his duties, as stated; that said receiver duly assigned and transferred to plaintiffs, the claim, demand, and right of action of the bank, and of himself, as receiver, against defendant, by reason of the premises.

The third count alleges the existence of the First National Bank of Ithaca, as stated; its ownership and possession of the note, as stated; that at the request of defendant the bank agreed to sell and deliver, and did sell and deliver, said note to him, for a large sum of money, to wit, $3,000; that defendant received and accepted said note, and has not paid therefor; that George Reed was appointed receiver of the First National Bank of Ithaca,- and qualified and entered upon his duties, as stated; that while so acting, and being thereunto duly authorized, he duly assigned and transferred to plaintiffs the right and interest of the bank and of himself in and to said demand and right of action against defendant by reason of the premises.

Plaintiffs gave evidence tending to support the claims -stated in the several counts of the declaration. Defendant pleaded the general issue. He denied the making of the agreement as stated in the various counts, and denied the allegations contained in the second count, and gave -evidence tending to support his denials.

The record contains upwards of 500 pages, and nearly 200 assignments of error. These assignments of error are •discussed under the following heads:

“ (1) We claim that there was no testimony in the case tending to prove that there was any contractual relations between the First National Bank of Ithaca and defendant, George A. Steel, as claimed by plaintiffs in their first and third counts of the declaration, in relation to the note in question, and that the trial court should have so instructed the jury.
“(2) We also claim that if this court should hold that there was testimony introduced in the case on the part of the plaintiffs tending to show contractual relations with the First National Bank of Ithaca and the defendant in relation to the note in question, said bank had, by its conduct, acts, and declarations after July 11,1896, disaffirmed and annulled any contractual relations that might have existed prior to that time in relation to said note by treating said note after July 11, 1896, as the property of the bank, and said bank, by its conduct, was estopped from maintaining any action against defendant based upon contractual relations. The bank being estopped, plaintiffs were likewise estopped from maintaining an action against the defendant upon contract.
“(3) We claim that the trial court should not have submitted the case to the jury under the second count of the plaintiffs’ declaration, for the reason that the testimony introduced by plaintiffs did not show or tend to show a fraudulent combination and conspiracy between the cashier of the bank and defendant in this case.
“(4) We claim that if this court should hold that there was testimony in the case tending to establish the allegations contained in the second count of plaintiffs’ declaration to the effect that there was a fraudulent conspiracy between the cashier of the bank and the defendant in relation to the note in question, then and in such case the National Bank of Ithaca suffered no damage by reason of the alleged fraudulent transaction set forth in said count, because the undisputed testimony in the case established the fact that the maker and indorser of said note were insolvent and uncollectible at all times after the date of the-note, and that the said note could not have been collected or secured at any time after the date thereof.
“ (5) If this court should hold that there is testimony in the case tending to show that the First National Bank of Ithaca might have collécted or secured said note, in whole or any part thereof, between the 16th day of August, 1895, and the 11th day of July, 1896, had it not been for the-fraud charged against the defendant in the second count of the plaintiffs’ declaration, then it became and was the duty of the trial court to submit to the jury the question as to the value and collectibility of the note in question during the period above named, and the probability of the bank being able to have secured the payment of said note in whole or in part during the period of time above mentioned.
“ (6) Can the plaintiffs in this case, as assignees of the First National .Bank of Ithaca, maintain an action against the defendant for the fraud and deceit charged against defendant in second count of the plaintiffs’ declaration P Is such a cause of action assignable ?
“ (7) The circuit court for the county of Gratiot had no power or authority, under and by virtue of the petition filed in said court, to make said order transferring to the plaintiffs in this case the cause of action set forth in the second count of the plaintiffs’ declaration.
(8) The First National Bank of Ithaca, having retained the note in question after it was entered upon the discount register July 11, 1896, as a part of the assets of the bank, until the said bank went into the. hands of the receiver, George Reed, and the said bank, by its receiver, George Reed, having sold said note in question as a part of the assets of the bank to the plaintiffs in this case in July, 1901, said bank and its' assignees, the plaintiffs in this case, are estopped from maintaining the cause of action set forth in the second count of the plaintiffs’ declaration.”

The proposition contained in heads 5 and 7 are especially relied upon by appellants. We have examined all of the propositions with great care. We do not deem it necessary to discuss them further than to say that we do not deem any of them well taken, except the propositions contained under head 5.

The circuit judge charged the jury as follows:

“ Now, if you find from the evidence that the defendant promised and agreed with said bank that if it would deliver to him the note in question he would remit the $3,000 to its New York correspondent, and afterwards the defendant entered into a fraudulent connivance and collusion with the cashier of said bank, whereby the defendant and the cashier conspired together, and by means of their state-merits and conduct and entries upon the hooks of the bank they intentionally and designedly, and for the purpose of cheating and wronging said bank, made and caused it to appear that the note had been delivered to the defendant, and that the defendant had remitted $3,000 to New York to the credit of the bank, when in fact he had not done so, and when in fact the note had not been delivered to the defendant, but had remained in the bank, or in the custody and control of the cashier, then the defendant would be estopped by such fraudulent conduct from defending here upon the grounds that the note had not in fact been delivered, and the note must be treated as having been delivered to him, and in such case your verdict should be for the plaintiffs for the amount of the note.”

The promise which it is claimed defendant made was an oral one, and, if not followed by an actual delivery of the note, would be void under the statute of frauds, and could not be enforced.

If what was done by Mr. Chafey and the defendant constituted such a fraud upon the bank as to entitle it to maintain an action as for fraud and deceit, as claimed in the second count of the declaration, then it was incumbent upon the plaintiffs, before they could recover for the "full amount of the note, to show that at the time of the alleged agreement the note was collectible, and, when it was made to again appear in the files of the bank, was worthless. It will be observed the trial judge omitted from his charge to the jury both of those very essential elements.

The case is reversed, and a new trial ordered.

Carpenter, Montgomery, and Hooker, JJ., concurred. Grant, J., did not sit.


text:
    DEAN v. RADFORD.

    1. Deed as Mortgage — Evidence.
    On a bill to have a deed declared a mortgage, evidence examined and held to show that the deed was a mortgage to secure the amount named as consideration therein.
    3. Chattel Mortgages — Evidence.
    On a bill to enjoin the foreclosure of a chattel mortgage, evidence examined and held that the mortgage was valid for an amount determined.
    Cross-appeals from Wayne; Hosmer, J.
    Submitted April 6, 1904.
    (Docket No. 192.)
    Decided October 4, 1904.
    Bill by Edgar S. Dean against George W. Radford and Laura E. Radford to have a deed declared a mortgage and to restrain the foreclosure of a chattel mortgage. Erom the decree rendered, all parties appeal.
    .Reversed.

      May & Dingeman, for complainant.

      Thomas A. E. WeadocJc, for defendants.

       Rehearing denied December 7, 1904.

   Moore, C. J.

In May, 1893, complainant made a contract with Bowen, Douglas & Whiting that they should conduct certain litigation for him to obtain a construction of a will made by his father. They filed a bill in chancery, on his behalf. Later complainant entered into a contract, the material parts of which read as follows:

“This agreement, made this first day of August, A. D. 1893, between Edgar S. Dean, of Detroit, of the first part, and George W. Radford, of the same place, of the second part, witnesseth: (1) That whereas, by the will of Horace M. Dean, deceased, father of said party of the first part, the share of the estate of Horace M. Dean devised to said Edgar S. Dean is so limited by the terms of the will of said Horace M. Dean, deceased, that no part of the principal comes into the possession or control of Edgar S. Dean j * * * (4) whereas, the law firm of Bowen, Douglas & Whiting has heretofore filed a bill in chancery, in the circuit court for the county of Wayne, for the purpose of obtaining construction of said will; and (5) whereas, said party of the second part has advanced one hundred and eighty-five dollars in cash to said first party with which, to pay for the services of said Bowen, Douglas & Whiting to date in said cause; and * * * (7) whereas, said first; party, for the purpose of security for the performance of this agreement, has conveyed to said second party by quitclaim deed an undivided one-fifth of all of said first party’s, interest in and to the said estate of Horace M. Dean, deceased : * * * It” is also agreed that, in consideration of his said services in said cause, said second party shall receive said one-fifth of all the estate and property which said first party shall acquire as the result of said suit, or twenty per cent, less of the proceeds of any settlement; said first party may make in said cause, approved by said second party, and independent of any income coming to. said first party under the terms of said will. And in addition to the above said second party is to first receive from said first party all sums heretofore advanced by said second party as aforesaid, and which he may hereafter advance to defray the costs of said suit as above provided.”1

Mr. Radford conducted said litigation to a successful ending. An opinion in complainant’s favor was handed down in this court December 7, 1894. Dean v. Mumford, 102 Mich. 510 (61 N. W. 7). During the progress of this litigation Mr. Radford made many advances to Mr. Dean to enable him to live and to aid him in his business operations. On the 14th of November, 1894, the parties had a settlement, when they both agreed there was due Mr.. Radford $3,025, for which amount Mr. Dean gave Mr. Radford his note, and it is Mr. Radford’s claim that the receipts and vouchers Mr. Dean had given'to him for the amounts represented by this note were delivered to Mr.. Dean and destroyed. In May, 1895, there had been art appraisement and partition of the estate between the widow and the various heirs, and certain real estate was set off to the widow as dower. It is claimed that under the contract Mr. Radford was entitled at this time to $5,875 as his proportion of the estate assigned to the complainant, exclusive of his interest in the real estate assigned to the widow as dower. At this time 260 shares of stock in the Detroit White Lead Works, to which complainant was entitled, appraised at $7,150, were assigned to' Mr. Radford. Receipts were exchanged at this time. On the 2d of November, 1895, a deed was drawn, running from Mr. and Mrs. Dean to Mr. Radford. The consideration named therein was $1,000. The property described therein was the real estate which had been assigned as dower to the widow. It was stated therein that the grantors were the owners of the property free and clear of incumbrance, except the dower interest of Mrs. Mary C. Dean, the mother of the complainant. This deed was acknowledged and delivered to Mr. Radford December 3, 1895. At the same time a mutual release was signed by Mr. Dean and Mr. Radford, reading as follows:

“This release, made this 3d day of December, A. D. 1895, between George W. Radford and Edgar S. Dean, both of the city of Detroit, Michigan, witnesseth: That the said parties have this day, for a valuable consideration, adjusted and settled all claims and demands which each holds against the other; and in consideration thereof each of the said parties, for himself and his legal representatives, release and discharge the other of and from all claims and demands whatsoever up to and including the said above date.”

It is the claim of Mr. Radford that because of this settlement and release at this time he delivered to Mr. Dean vouchers and notes given by him to Mr. Radford. Later than this Mr. Radford let Mr. Dean have various, sums of money, to secure the payment of which a chattel mortgage was given, upon which it is claimed there was due at the time this cause was decided about $560.

In June, 1902, the complainant filed this bill of complaint, alleging that the deed of December 3, 1895, was in fact a mortgage given to securó the payment of $1,000' and interest, and that complainant had caused to be tendered to Mr. Radford in October, 1901, the sum of $1,355, and that to secure a later debt of $549 he had given a chattel mortgage to Mr. Radford, and that Mr. Radford claimed the deed of December 3, 1895, was an absolute deed, and threatened to foreclose the chattel mortgage if complainant took any steps to recover the real estate. The bill prayed for an accounting, and that the deed might be treated as a mortgage, and for an injunction restraining defendant from foreclosing the chattel mortgage.

The defendant answered at great length, claiming the deed of December 3, 1895, conveyed to him the title in fee, subject to the dower interest of the widow of Horace M. Dean, and that the chattel mortgage was a valid mortgage. The case was heard in open court. The judge held that the deed of December 3, 1895, was a mortgage, and that there was due from Mr. Dean to Mr. Radford $892.14 as principal and $316.64 as interest, and that upon payment of that amount Mr. Radford and his wife convey an undivided 4/25 of the property described in the deed to the complainant. He also decreed the chattel mortgage to be without consideration and void, and ordered it canceled.

It is the claim of complainant that the decree should have required the conveyance of 5/25 interest, instead of 4/25, and for that reason complainant has appealed the case. We deem it unnecessary to discuss this claim, further than to say' we think the circuit judge gave a proper construction to the contract and the papers relating to this feature of the case.

The defendant George W. Radford claims the deed was not a mortgage, but a valid deed, and should have been so held. He also contends that, if treated as a mortgage, there is a much larger amount due than the circuit judge found. He also claims the chattel mortgage should not have been canceled. For these reasons he has appealed.

The consideration of the case has been attended with great difficulty. Neither party kept books of account in which the dealings between them was stated. Counsel for defendant has prepared a careful statement of what he claims on behalf of his client. The counsel for complainant on this branch of the case have contented themselves with printing in their brief the written opinion of the circuit judge. As before stated, Mr. Radford claims that at the times settlements were had and receipts given he delivered to Mr. Dean receipts and vouchers showing the state of the accounts. He produces in court such checks as he has, which he gave to Mr. Dean. They cover a very large portion of the items. The items most in dispute between the parties are one of $185 mentioned in the contract of August 1, 1892, an item of $500 represented by check 6,262, dated January 25, 1895, and an item of $327.69, insurance money paid to Mr. Radford. When he decided the case the circuit judge disallowed the $185 item and the $500 item. He said of the item of $500 that, if there was a check for it, he had unquestionably done Mr. Radford an injustice.

We will take up the item of $185 first. Mr. Radford swears positively that he let Mr. Dean have this money as stated in the contract of August 1, 1892; that Mr. Dean said he wanted the money to pay Bowen, Douglas & Whiting, so that they should not know from whom it came. Owing to the absence of a member of that firm, settlement was not made with them until September 19, 1892, when they were paid $200 by Mr. Radford giving his check for that amount. Mr. Dean denies receiving this money. Mr. Radford says Mr. Dean received it and used it. The contract recites it was advanced. The contract contemplates Mr. Radford should make advancements. Mr. Dean was at this time needing money. In addition to producing the check of $200, paid to Bowen, Douglas & Whiting September 19, 1892, one of $265 is produced, dated October 8th, for money which Dean got; November 23d one for $10; November 29th one for $10 — sums received by Dean; and other sums follow later. There can be no serious dispute but that the parties got together November 14, 1894, when the recollection of both of them ought to have been clear as to this item of $185, and arrived at a settlement showing $3,025 due Mr. Radford, for which Mr. Dean gave his note; and in his testimony he says several times he owed Mr. Radford at this time $3,000, and claimed it was paid January 18, 1895, by delivering to Mr. Radford John Ward’s check of $3,000. We think it fairly certain Mr. Dean received the $185.

The $500 item is evidenced by check 6,262 for that amount, delivered by Mr. Radford to Mr. Dean. Mr. Dean admits he had the money, and paid it to Larabee & Forncrook on account of lots he had bought of them. He says he had the money in the bank, and when he wanted to get the $500 the bank was closed, and would not open until 6 o’clock, and for that reason he got the check from Mr. Radford; that when the bank opened at 6 o’clock he got the money and paid it to Mr. Radford, who put it in his vault and kept it there that night; that he delivered it in the presence of Mr. Race. Mr. Race was sworn as a witness, and has no recollection of such a transaction. Mr. Radford swears positively it did not occur. We think he should be charged with this item.

As to the insurance item, defendant says complainant was credited with it, and produces checks showing where it was paid out. Complainant admits it was paid out as stated, but claims he got no credit for it. It cannot be demonstrated, from the state of the account as disclosed by the record, what the fact is. Defendant has produced checks aggregating $10,466.74. He also claims that, exclusive of the item of $185 which we have already considered, he paid to Mr. Dean six items for cash paid to Mr. Dean, aggregating $251.90, and that there were sundry, other charges for average interest on balances due him and services not embraced in the contract, for which amounts settlements were agreed upon, aggregating $1,243.82, and that, after allowing all credits to which Mr. Dean is entitled, including the insurance of $327.69, there is a balance in Mr. Radford’s favor of upwards of $2,000. We think that the evidence is fairly clear that in the dealings subsequent to the giving of the deed of December 3, 1895, and prior to the computation of the amount due on the chattel mortgage in September, 1901, made by Mr. Morse, of which computation the complainant had full knowledge, this item of insurance money, $327.69, received September 20,'1897, was accounted for.

Troublesome as the foregoing questions have been, we come now to two even more difficult ones: (a) What was the consideration of the deed? (6) Was it a mortgage?

The deed recites the consideration to be $1,000. Mr. Dean swears that was the amount, ánd he produces a paper, which his counsel say was delivered to him by mistake, in the handwriting of Mr. Radford, commencing: Detroit, Mich., 188 — . In account with George W. Radford, attorney,” etc. Then follow, commencing with May 31, 1895, 12 different charges, and then the following, under date of December 4, 1895: “ By deed of dower reversion, $1,000.” Then follow 20 charges, aggregating nearly $1,700. Mr. Morse, a reputable attorney, then in the employ of Mr. Radford, now dead, who drew the deed, testifies that the consideration was the cancellation of the balance due from Mr. Dean, which he understood was $1,000 or $1,200, and $600 to be paid to him by Mr. Radford, which was afterwards paid. He also says the amount of the consideration named in the deed was fixed by Mr. Dean. Mr. Radford’s testimony .is substantially the same as that of Mr. Morse, except that he put the amount due to him several hundred dollars higher than does Mr. Morse. He also says he had no knowledge of the amount named as the consideration in the deed until it was delivered to him. Human recollection after a long interval of time is so faulty that we are inclined to give great weight to the written memorandum. That made by Mr. Morse in the deed states it to be $1,000. The memorandum made by Mr. Radford as of December 4, 1895, the next day after the deed was delivered to him, reads: “By deed of dower reversion, $1,000.” We think these written memorandums should control.

We now come to a consideration of the question, Should the paper be regarded as a mortgage ? Mr. Dean says it was so understood. Miss Doolittle was of that impression, though her testimony, standing alone, would have little value. Mr. Morse and Mr. Radford both say Mr. Dean, sold the property, and that the deed was not intended to-be a mortgage. In reaching a conclusion, it is well to consider the value of the property and the situation of the parties. We have already reached the conclusion that the consideration was $1,000. The assessed valuation of all the property described in the deed was $33,800. At the time the deed was made Mr. Dean delivered to Mr. Radford a statement from Larabee & Forncrook, real estate men, estimating the property to be worth $60,500. In the appraisal of the estate of Horace M. Dean, made by men familiar with real estate, when it was assigned to th© widow as dower, it was called worth $57,700. We think a great preponderance of the testimony shows it was worth, at least $57,000. Upon this basis 4/35 would be worth. $9,130. It has been made clear that the 4/35 of the land is subject to the dower of Mary C. Dean. She was 54 years old at this time. We do not know of any proper method of computation which will reduce the value of real estate, worth $9,130 if no dower interest therein existed, to $1,000 because of a dower interest possessed therein by a woman 54 years old. It should not be forgotten that the relationship of client and attorney existed between these parties. Both Mr. Morse and Mr. Radford say, when this deed was made, Mr. Dean was in straitened circumstances, and give that as a reason why he was anxious to sell the land. In any aspect of the case, we think this deed ought to be treated as a mortgage, upon which there is due as principal $1,000 and interest from date. A careful examination of the record leads us to th© belief that there was due on the chattel mortgage September 38, 1901, $559.74, no part of which has been paid. That part of the decree which canceled the chattel mortgage should be set aside.

The decree is reversed, and one will be entered here in accordance with this opinion.

The other Justices concurred.


author: Moóre, C. J.

text:
    PHELPS v. O’CONNOR.
    Taxation — Tax Sales — Bill of Review — Dismissal—Costs.
    Where complainant, in a bill to review a decree for the sale of land for taxes, though he fails to make a case, obtains a longer time in which to redeem than he would have had if he had not filed the bill, it is error to dismiss the same without costs to defendants.
    Appeal from Gratiot; Stone, J.
    Submitted April 8, 1904.
    (Docket No. 25.)
    Decided October 4, 1904.
    Bill of review by Clark S. Phelps and another against William O’Connor and Perry P. Powers, auditor general. From a decree dismissing the bill without costs, defendants appeal.
    Reversed.

      Wilson & Wilson, for complainants.

      Thomas, Cummins & Nichols, for defendants.
   Moóre, C. J.

On February 6, 1903, the auditor general obtained a decree for the sale of certain lands belonging to the complainants for the taxes of 1899 and previous years. The lands were sold at the tax sale in May, 1903, and bid in by the State. The State, on October 31, 1903; sold them to William O’Connor, trustee, and issued a certificate to him. The complainants claim it was not until January, 1903, they heard of these proceedings. Prior to .April 27, 1903, they filed a petition asking leave to file a bill of review for reasons stated in their petition. Service of this petition was made upon the auditor general and upon William O’Connor. A hearing was had thereon, the prosecuting attorney appearing for the auditor general and the drain commissioner. No one appeared for Mr. O’Con-nor. The judge granted the prayer of the petition, but “ordered that said petitioners pay the amount of said tax, together with interest to date on same, into court, pending the final disposition of said cause, and that the said auditor general be, and is hereby, ordered and directed to issue no deed for the said tax on petitioners’ lands as set out in their said petition, to any person or persons, until the final disposition or the further order of this court; and in case, on said hearing upon the said bill of review, the final decree should be against said petitioners, then said funds paid into court shall be applied to the discharge of said tax lien.”

The money was paid into court the next day after the order was made. The bill of review was filed within a few days, in which it was prayed that the several taxes mentioned therein “may be set aside, canceled, and held for naught; and that your orators may have such other and further relief in the said premises as equity and good conscience may require and to this honorable court may seem meet.”

An answer and replication was filed. The case was heard, and the judge made a decree November 16, 1903, that the bill of complaint be dismissed, but without costs, and that the register remit to the auditor general the amount of said tax, together with the interest thereon, that being the moneys paid in by complainants for the redemption of said lands, and that he issue a certificate of redemption from the said taxes.

The defendants have appealed. It is their claim that the decree of the court directing the auditor general to issue his certificate of redemption is erroneous for the following reasons: (1) Because it is not based upon the pleadings or any issues in the case; and (3) because a court of equity bps no power to extend or modify in any manner the provisions of the statute with reference to redemption from tax sales.

It will be observed that the effect of the decree is to deprive the defendants of their costs, though the bill of review was dismissed, and complainant, though he failed to make a case calling for the intervention of the court, obtained a longer time in which to redeem than he would have had if he had not filed the bill of review. We think the court should have dismissed the bill of complaint, with costs to the defendants.

The decree is reversed, and one will be entered here in accordance with this opinion. Appellants will recover costs in this court.

The other Justices concurred.