text:
    COVENEY v. PATTULLO.
    1. Attorney and Client — Contracts.
    A contract between an attorney and his client, made after the relationship exists, must be fair and reasonable.
    2. Same — Fee in Criminal Case.
    Where a person, resident of Michigan, is arrested in the Klondike on a charge of obtaining money by menaces, three witnesses only being sworn on the examination, and his attorney does not appear at the arraignment, and there is no trial, but a settlement of the case is brought about by the attorney, §700 is deemed adequate compensation.

      3. Same — Unconscionable Fee.
    In such case a mortgage of §800, given as additional compensation by the respondent while in jail, and away from home and friends, and unable to get bail, and as a condition for the attorney to secure his release, is unconscionable, and should be canceled.
    Appeal from Berrien; Coolidge, J.
    Submitted January 8, 1902.
    (Docket No. 30.)
    Decided April 8, 1902.

      . Bill by Joseph E. Coveney against James B. Pattullo to set aside a mortgage. From a decree for complainant, defendant appeals.
    Affirmed.
    ■ O'Hara & O'Hara, for complainant.

      Edward 8. Kelley and Lawrence O. Fyfe, for defendant.
   Moore, J.

The bill of complaint in this cause was filed for the purpose of obtaining a decree canceling and declaring void a certain mortgage executed by complainant to defendant July 10, 1900, at Dawson, Yukon territory, on lands situate in Berrien county. The bill alleges that the mortgage was obtained by fraud, conspiracy, duress, and was without consideration. It is alleged that in the latter part of May, 1900, the complainant went to Dawson, in the territory of Yukon, and there met one Frank Phiscator, who had formerly lived in Berrien county; that complainant had a just cause of action for damages against Phiscator. Upon meeting Phiscator at Dawson, the complainant and Phiscator entered into negotiations, the result of which was an agreement by Phiscator to pay complainant $7,000 in consideration of a release of all claims against him by complainant, and upon condition that complainant at once leave the Klondike region. On the 26th of May, 1900, Phiscator paid complainant $7,000, and on the same day the money was placed in a bag, and committed to the charge of the purser of a steamboat, upon which complainant had engaged passage for the purpose of returning to the United States. A few minutes after this, complainant was arrested by officers of the Yukon territory upon the charge of robbery, preferred by Phiscator, and lodged in jail at Dawson. Complainant thereupon inquired for an attorney, and employed the defendant to defend him. Complainant then had $200 with him, which Pattullo exacted, and which complainant paid him. Pattullo informed complainant that there was no case against him. Two days after his arrest, an examination was had before a justice, and complainant was bound over to appear at the territorial court on June 16, 3 900. Pattullo did not appear before the court on the day assigned, although complainant sent for him. Complainant pleaded not guilty to the complaint, it having been amended to a charge of unlawfully obtaining money by menaces. The case was then adjourned to September 17, 1900. The complainant then became suspicious of Pattullo, and insisted upon having another attorney; and another attorney (Mr. White) was thereafter employed to act with defendant as assistant counsel. On the 8th day of July, 1900, while complainant was in jail, the defendant and White came to the jail, and informed him that they could obtain his release from imprisonment, and his liberty, upon the following conditions: (1) That complainant must plead guilty to the charge against him; (2) pay to defendant $200 in cash, complainant having already paid him and White $500; (3) sign a written statement of retraction, reciting that Phiscator had never wronged him, that his accusation against Phiscator was false, and that complainant had threatened Phiscator’s life to compel him to give complainant $7,000; (4) complainant must execute a mortgage upon his farm in Berrien county, Mich., conditioned to pay Pattullo $800 more for attorney’s fees; (5) complainant must assign and pay back to Phiscator the $7,000.

The bill alleges that the complainant, having then been in jail 44 days, and being anxious to regain his liberty at any expense, and unable to obtain bail, and in a state of mind in which he could be induced to agree to anything in order to obtain his liberty, consented to the conditions required, did execute the mortgage heretofore described, signed the recantation, caused the $7,000 to be paid back to Phiscator, and went into court and pleaded guilty to the charge against him. Complainant thereupon left the territory, and returned to the United States. The bill further alleges that complainant paid to the defendant $700 in cash while he was in jail at Dawson; that this was more than the services of him and White were reasonably worth; that a charge of $1,500 is unreasonable and extortionate; and that the mortgage was not his free act and deed, but was procured through undue influence, and taking advantage of his fears and feeble condition while in imprisonment. The bill further charges that the defendant was in league-with Phiscator for the purpose of defrauding him and extorting an unreasonable fee. The bill concludes with a prayer for a decree cancélíng the mortgage.

The answer admits the execution of the mortgage described in the bill of complaint; that the complainant signed the writing of recantation referred to, agreed to-plead guilty to the charge against him, and that he did plead guilty thereto; that he paid back or caused to be paid back to Phiscator the said sum of $7,000; and that these acts and agreements on complainant’s part were done and entered into as a condition of being released from prison on a suspended sentence, on complainant agreeing to leave the territory. The answer alleges, however, that these acts were done in consequence of the voluntary offer-on complainant’s part, and not on account of any inducement held out or restraint imposed on complainant by defendant, White, or anybody else. The answer further alleges that the services of defendant and White were reasonably worth $1,500; that complainant voluntarily offered to pay defendant $1,000 if he would obtain his release from jail; and that, on the employment of White, it was agreed by complainant to pay the further sum of $500 for attorney’s services. It is further alleged that complainant himself suggested the giving of a mortgage to secure the payment of the services of defendant and White. The answer then gives a version of what occurred in court. The answer further alleges that defendant was involved in great labor in his services for the complainant; that the services of himself and Mr. White were reasonably worth $1,500; and that, considering the high prices of everything in Yukon territory, the charge-was in no wise unreasonable.

The testimony of complainant was taken in open court. The testimony on the part of the defendant was taken by deposition. The circuit judge found that the making of the mortgage was as much a condition of complainant’s obtaining release from jail as any other of the requirements ; that it was not the free and voluntary act of complainant; that, as a matter of fact, the services of defendant and White for complainant were not reasonably worth more than $700, and that a fee of $1,500 is grossly excessive and exorbitant; that the mortgage was obtained by the undue influence of an attorney'over a client, while the latter was in jail, and in a desperate frame of mind; and made a decree in accordance with the prayer of the bill. The case is brought here by appeal.

This is not a litigation between Phiscator and Coveney, in which it is necessary for us to decide whether illicit relations existed between the wife of Coveney and Phiscator, for which, upon the appearance of Coveney in the Klondike, Phiscator, without threats being made to him, was willing to cause $7,000 tobe handed over to Coveney, as the latter claims, or whether Phiscator was the victim of a conspiracy and a scheme to blackmail him, and, as a result of threats made by Coveney to kill him, was induced to part first with $2,500 in Baroda, Mich., before going to the Klondike, and afterwards, for the same reason, caused to be delivered the $7,000 in the Klondike, as claimed by Phiscator. The litigation is between an attorney and client in relation to a contract made between them when the client was under arrest and in jail. The inquiry is whether the contract is so just and reasonable it ought to stand, or whether it is so unjust and unconscionable it ought to be set aside. It is said by counsel for defendant that, if a man is legally imprisoned, and to procure his discharge seals a bond or deed, this is not duress (citing cases), and that an agreement to pay a just debt, made while under legal imprisonment, cannot be avoided on the ground of duress. If it be conceded these are correct statements of the law, they do not meet the proposition presented here. This is not a mortgage running to the person who caused the arrest to be made, and who was seeking to collect a debt, as was the case in Prichard v. Sharp, 51 Mich. 432 (16 N. W. 798), but it is a dealing between attorney and client, which must be characterized by fairness and reasonableness if it is to stand. In 3 Am. & Eng. Enc. Law ( 2d Ed.), p. 433, it is said:

“Contracts for Compensation after Relation Established — Such Contracts Jealously Guarded. An attorney cannot make use of the relation bétween himself and his client to extort from the latter an unjust or unreasonable contract, for compensation, and a court of equity will grant relief from such oppression, and will confine the attorney to a reasonable charge for compensation,” — citing many cases.

See, also, Will. Eq. Jur. (Potter’s Ed.) p. 172; Howell v. Ransom, 11 Paige, 538; Hitchings v. Van Brunt, 38 N. Y. 335.

In Dickinson v. Bradford, 59 Ala. 581 (31 Am. Rep. 23), it is said:

‘' The relation of an attorney to his client is one of trust and confidence, in which influence is of necessity acquired. The law does not incapacitate him from contracting with, or from becoming the recipient of the bounty of, the client. It does, however, command that all his transactions with the client shall be anxiously and jealously scrutinized, that the client maj'' be protected from his own overweening confidence, and from the influence or ascendancy which the relation generates. 1 Story, Eq. Jur. §§ 310-314; 2 White & T. Lead. Gas. Eq. (4th Am. Ed.) 1216. There may be no trace of deceit, or of imposition, or of overreaching advantage, — no mark of actual fraud, which would justify a court in interfering for the rescission, or in refusing to compel performance, if the contract had been made between persons not sustaining a relation in which confidence was reposed and influence acquired. The, court does not interfere, or refuse interference, because there has been deceit, or imposition, or actual fraud, but, independent of such facts and ingredients, upon considerations of public policy, to prevent fraud, an abuse of confidence and influence, and to compel fidelity and unselfishness in the performance of fiduciary duties.
‘ ‘ In this State attorneys and solicitors are entitled to compensation for their services. Before entering on the business of the client, and suffering him to repose in them the trust and confidence of the relation, they may stipulate the measure of their compensation, and, if the client assents, the contract is as valid and as free from objection as any other contract into which he may enter. But if they assume the relation, enter on the duties, thereby inviting confidence and acquiring influence, without expressly stipulating the measure of compensation, no subsequent agreement with the client can be supported, unless it is satisfactorily shown that the compensation does not exceed a fair and just remuneration for the services which have been and which it is the duty of the attorney to render. Lecatt v. Sallee, 3 Port. 115 (29 Am. Dec. 249); McMahan v. Smith, 6 Heisk. 167; Planters’ Bank v. Hornberger, 4 Coldw. 578.
“ Standing, as the parties do, in a relation of confidence, which gives the attorney or solicitor an advantage over the client, the burden of proof lies on the attorney or solicitor; and, to support the contract made while the relation existed, he must show the fairness of the transaction and the adequacy of the consideration. The principle is thus stated by Judge Story:
“ ‘But the burden of establishing its perfect fairness, adequacy, and equity is thrown upon the attorney, upon the general rule that he who bargains in a matter of advantage with a person placing a confidence in him is bound to show that a reasonable use has been made of that confidence, — a rule applying equally to all persons standing in confidential relations with each other.’ 1 Story, Eq. Jur. § 311.”

See, also, Brock v. Barnes, 40 Barb. 529; Merryman v. Euler, 59 Md. 588 (43 Am. Rep. 564).

With these principles of law in mind, it is well to recall certain facts which are established beyond any question. On May 26th, very soon after the $7,000 was delivered to him, Coveney was arrested thousands of miles from home, among strangers, and put in prison, where he was kept for most of the time in a cell where the conditions were very unpleasant. He sent for and retained Pattullo, paying him $200. On the 28th of the same month he was taken before the examining magistrate, but, as Phiscator did not appear, the examination was adjourned for three days. At that time three witnesses were sworn, and Coveney was held for trial at the territorial court. On June 16th he was taken before that court for arraignment. He says he sent for his counsel. Whatever the fact may be as to that, his counsel was not present. He was arraigned, pleaded not guilty, and his case set for trial September* 17th, in the absence of counsel. Complainant says, because of the failure of his counsel to appear when he was arraigned, Mr. White was called into the case. Whether that was the reason or not, Mr. White was in fact brought in, and a further payment was made. July 7th a still further payment was made, making in all $700, which was paid in cash. There is some dispute as to whether the mortgage was signed on the 10th of July, or a day or two earlier; but not later than the 10th of July a mortgage for $800 was given, and on the same day Mr. Coveney, at least with the consent of his counsel, entered a plea of guilty to the complaint lodged against him by Phiscator, made a recantation in writing reciting that his charge against Phiscator was false, and that he obtained the $7,000 through threats and blackmail, and agreed to return to Phiscator the $7,000, and also agreed to leave the country at once. We do not think there is any evidence to connect defendant with the arrest of complainant, or with any conspiracy with Phiscator; but we do think the evidence shows he has been liberally paid for all he did, and that taking the mortgage under the circumstances was unconscionable, and that it ought not to be enforced.

The decree is affirmed, with costs.

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


source: Caselaw Access Project

author: Moore, J.

license: Public Domain

text:
    ATTORNEY GENERAL, ex rel. GARTHE, v. CAMPBELL.
    Elections — County Canvassers — Recount—Adjournment.
    Where a candidate for probate judge petitions the board of canvassers in due time for a recount under sections 3671, 3672, 1 Comp. Laws, an adjournment by the hoard, without his fault, for 12 days, at which time the opposing candidate appears with his counsel, does not deprive the petitioner of his right to a recount.
    Error to Leelanaw; Chittenden, J., presiding.
    Submitted January 9, 1902.
    (Docket No. 35.)
    Decided April 8, 1902.

      Quo xoarranto proceedings by Horace M. Oren, attorney general, on the relation of Steiner C. Garthe, against James E. Campbell, to try the title to the office of judge of probate for Leelanaw county. From a judgment for relator on verdict directed by the court, respondent brings error.
    Reversed.

      Patchin & Crotser (O. L. Dayton, of counsel), for appellant.

      Smurthwaite & Foster (Parm. G. Gilbert and O. <7. Ransom, of counsel), for appellee.
   Moore, J.

This is a quo warranto for the purpose of testing the title to the office of judge of probate for Leelanaw county. Mr. Campbell, for some years prior to January 1, 1901, was judge of probate. He was a candidate for re-election at the November election in 1900. Mr. Garthe was also a candidate for election. The board of county canvassers met November 13th, and were in session that and the following day. They canvassed the returns, and decided that the relator was elected to the office of judge of probate, and gave him a paper so stating, which he claims is a certificate of election. The respondent filed a petition for a recount under the statute. This petition was filed with the board of county canvassers on November 14th, before their adjournment, as provided by statute; and the fees necessary to secure a recanvass were deposited with the board at that time. November 26, 1900, was fixed by the board as the time for making the recount. The petition, together with notice of the time for making the recount, was served on the relator on November 20, 1900, — six days before the recount. The recount was had November 26th. At the recount the board of county canvassers 'found that the respondent had more votes, according to the recount, than had the' relator, and forwarded him a statement to that effect. The relator was present with his counsel at the time of the recount, and it does not appear that he took any exception to the notice which was served upon him, or to having a hearing at that time, or made any objection because of the time of the notice or of the hearing, though he protested against the recount, claiming some of the ballot boxes had been tampered with. The relator and the respondent each filed an oath of office, and each claims to be elected, and to have a certificate of election from the board of canvassers. The respondent refusing to surrender the office, this proceeding was instituted.

Upon the trial the relator introduced what he claimed was a certificate of his election, his oath of office, and a demand for the office, and the refusal of respondent to surrender it. On the part of the defendant, what he claimed was a certificate of election, given to him by the canvassers after the recount, was received in evidence; but as it was not read into the record, and is no part of the bill of exceptions, we are unable to say what it contained. For the purpose of showing the canvassers had jurisdiction to make the recount, the respondent offered in evidence his petition for a recount, attached to which was the notice to the relator of the hearing, and the return of service upon him. Objection was made to its admission. The circuit judge was of the opinion the respondent must give the relator 13 hours’ notice of the hearing before the filing of the petition, but, in any event, this 13 hours’ notice must at least follow immediately after filing the petition, and that the board of canvassers should proceed forthwith to make a recount, and that the board of canvassers could not adjourn the hearing for 13 days. The circuit judge sustained the objection, and directed a verdict in favor of the relator.

The question involved is the construction which shall be given to sections 3671, 3673, 1 Comp. Laws, which read, in part, as follows:

“(3671) Seo. 10. Any candidate voted for at any election at which State, county, or district officers are voted for, who conceives himself aggrieved on account of any fraud or mistake in the canvass of the votes by'the inspectors of election or the returns made by said inspectors, may, on or before the close of the last day upon which the board of county canvassers meet, present to and file with the clerk of such board a written petition, which shall be sworn to, setting forth, as near as may be, the nature of the mistakes or frauds complained of, and the township, ward, or district in which they occur, and asking for a correction thereof. * * *
“(3673) Seo. 11. Upon filing the petition and making the deposit required in the preceding section, and giving at least twelve hours written notice thereof to the opposing candidate, by handing to such candidate a copy thereof, or, if such candidate cannot be found, by leaving such copy at his last place of residence, it shall be the duty of such board of canvassers to investigate the facts set forth in said petition. For such purpose the said board shall have power to cause the ballot-boxes used in such election districts to be brought before them. The board shall thereupon, in some public place where such candidates and their counsel may be present if they so desire, proceed forthwith to open the ballot-boxes from such districts, townships, or wards, and to make a recount thereof as to such candidates.”

It is claimed the construction given to this statute by the circuit judge is in accord with the opinion in Pound v. Board of Canvassers of Wayne Co., 130 Mich. 181 (79 N. W. 114), as follows:

“Additional evidence that neither this act nor the act of 1887 was intended to apply to State officers is found in the fact that by section 11 notice is required to be served on the opposing candidate 12 hours before presenting the petition to the board, or, if the candidate cannot be found, by leaving a copy of the notice at his last place of residence. It can hardly be assumed that it was intended to require the attendance of a candidate for State office at a county distant from his residence on 12 hours’ notice. Much less can it be inferred that leaving a notice at his residence 12 hours in advance of a hearing at which his rights would be affected would be deemed adequate by the legislature.”

An inspection of that case will show the question involved was whether, by the terms of the statute, it was intended to give a candidate for the office of circuit judge the right to a recount, and it was held it was not; and, as illustrating the intention of the legislature in passing the act, the language quoted was used by Justice Montgomery. The question of the notice or its timeliness was not involved at all in the case, and was not intended to be passed upon.

It does not appear why the board of canvassers made the adjournment. The county was a large one, without railroad facilities. Nor does it appear the adjournment was had at the request of the respondent. It does appear that, on the day of the hearing, the relator and his counsel and the respondent were present and participated in the hearing. The case of McKenzie v. Board of Canvassers of Port Huron, 70 Mich. 147 (38 N. W. 11), is in point. In that case the statute under construction was like the one involved here. The relator petitioned for a recount. The canvassers, thinking it unnecessary to make it, adjourned April 5th without taking further action. May 3d this court handed down an opinion holding the party who felt aggrieved had a right to a recount. An order was made requiring the canvassers, within 10 days after service of the copy of the writ of mandamus, to meet and make the recount. In this case the petition for a recount was filed in time.. Without the fault, so far as it appears by the record, of the respondent, the board, instead of refusing to make a recount, adjourned 12 days for the purpose of making it. If the board had utterly refused to act, this court would have compelled them to do so, even though more than a month had intervened. This being so, will it be held that because the board adjourned 12 days, and then acted, their action must be set aside, and the respondent lose his right to a recount ? We think this question must be answered in the negative.

Judgment is reversed, and a new trial ordered.

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


author: Moose, J.

text:
    HAYES v. FREDERICK STEARNS & CO.
    1. Negligence — Dangerous Openings.
    Trapdoors are dangerous openings, and, when left open, should be properly guarded.
    2. Same — Removal op Business — Trapdoor.
    The disorder and confusion incident to the removal of a business to another location does not relieve the proprietor from the duty to an employé, who has never been there before, of properly guarding a trapdoor.
    8. Master and Servant — Unknown Danger — Duty to Warn.
    An employé who, in a strange place, is set to work carrying a box, in a manner to obstruct his view, upon a platform used for unloading goods and as a traveled way for employés, has a right, in the absence of any warning, to assume that there are no dangerous openings in the platform.
    4. Same — Dangerous Place — Neglect op Fellow-Servant to Warn.
    Where the action of the defendant in constructing a trapdoor and leaving it open in the line of travel contributes to the injury of a servant, the employer cannot escape liability on the ground that a fellow-servant saw and knew of the danger, and might have prevented the injury by warning the plaintiff.

      Error to Wayne; Carpenter, J.
    Submitted January 30, 1902,
    (Docket No. 110.)
    Decided April 8, 1902.
    Case by John R. Hayes against Frederick Stearns & Company for personal, injuries. From a judgment for plaintiff, defendant brings error.
    Affirmed.

      Edwin E. Conely and Orla B. Taylor, for appellant.

      James McNamara and Frank O. Cook, for appellee.
   Moose, J.

This case was commenced in the circuit court to recover for injuries received from falling through, an open trapdoor. It was tried before a jury. The plaintiff recovered a judgment of $2,500. The case is brought here by writ of error.

The defendant company is engaged in the business of manufacturing chemists. In the latter part of 1899 and early in 1900, it moved its business from the west side of the city of Detroit to the corner of Bellevue and Jefferson avenues. The new laboratory covered nearly a block. It was three stories high, and built around a court. At the time of the accident plaintiff was 29 years old. Prior to the accident he had worked 4 or 5 years for defendant company, running two hydraulic presses. He was sent to work at the new laboratory Friday, January 19th. He worked a few hours in the tablet department. The balance of that day and on Saturday he worked in the pill-finishing room. The following Monday he was set to work in the elixir room, unpacking and assorting jugs, and continued to work there until the time of the accident, which was on the morning of Wednesday. At this time, the defendant was still engaged in moving, and did not get fully settled in its new quarters until some weeks later. The version of the plaintiff of the transaction is substantially as follows:

“ As we unpacked the bottles, we put the excelsior, shavings, and mats into a large, rough, board box. I brought it in from the courtyard. This box was about 4 feet long, 3 feet broad, and 4 feet high. We put about 100 or 150 pounds of sawdust, shavings, and excelsior into that box. The shipping room is in the same side of the building, closer to Jefferson avenue. It might be a couple of hundred feet from the door coming out of the fluid-extract room to the door going into the shipping department; the doors being on the same side of the court. The door to the fluid-extract room is about on a level with the yard. Outside of the door leading into the shipping room there is a platform. There are two doors going into the shipping room. This platform might be about 90 or 100 feet long, and about 9 yards wide. It is 3 or 4 feet high,— high enough for a wagon to back up against, and load and unload straight to the wagon. It was used for that purpose. At the south end of the platform there are steps leading up to it. At the north end there is a slope about 10 or 15 feet long. There was no other way of getting into the shipping room from the fluid-extract department except through these doors.
“When we got the box filled with shavings and excelsior, Callan told Olschefski and me to take it to the shipping room. He said he could use it over for repacking some stuff. I had never been in the shipping room up to that time, nor had I ever been on this platform outside of the shipping room. Olschefski took the front end of the box, taking hold of it at the bottom, and I took hold of the back end. His back was towards me. I got hold of the box underneath. There were no handles upon it, nor was there any way of taking hold of it except to take hold of the bottom. I lifted it up the length of my arms, and walked straight along. The top of the box came right up in front of my face. I could not see over it. When we came out of the fluid-extract room we went along the yard until we got to the sloping end of the platform, which we went up. The platform was piled up with cases of drugs and barrels. They were right on the inside of the platform, piled along by the wall. They extended out far enough from the wall so as just to leave a passageway to walk on. They were along the whole platform, except the space opposite the door, which was left vacant. This passageway was about 3 or 4 feet wide. When we walked up this sloping end of the platform, we went along the passageway until we got as far as the trapdoor. That might be about 15 feet from the end of the platform. We had not got as far as the door opening into the shipping room. By the ‘trapdoor’ I mean a hole cut in the platform. It was about 3 feet square. It was on the outer edge of the platform, — right on the passageway where we were walking. There was no cover over this hole. When I came to this hole I fell right into it, — down into the basement. That was the first time I ever saw the hole, — when I was taken out of it. I did not see it when I fell into it. I walked along with the box, just as I was walking, and the first thing I knew I dropped right into it. I fell down to the bottom. It might be 5 or 6 feet deep. There was a cellar under this platform, for shavings, packing, and stuff, and a concrete floor. I did not know that this hole was there when I stepped into it.”

He received injuries which are claimed to be permanent.

Olschefski testified:

“ It was a box that was made to pack 2 gallon bottles in. It was 1 foot 6 inches wide by 3 feet long and 2 feet deep. I nailed handles on each end, so that we could carry it more easily. They were made out of boards, and stuck out about 2 feet at each end. I nailed them on the box about 10 days before the accident happened. I was working with that box every day, — using it to carry shavings out in.”

Other witnesses testified to about the same thing. Testimony was given tending to show there was room enough, because of the projecting handles, so that plaintiff could see, between the end of the box and his body, where he was going. This is denied on the part of the plaintiff. Olschefski testified that he warned the plaintiff of the existence and approach to the hatchway as they passed along, carrying the box. His testimony is: “I told plaintiff to look out for it. Those are the words I used.” Plaintiff denies that he was warned. The jury were charged:

“If the plaintiff was informed by Olschefski, who accompanied him, of the existence of this hole, then he had all the information that he could have had from the defendant itself, and consequently there could be no recovery.”

Counsel contend negligence was not shown, and say:

“It is beyond all controversy that the plaintiff knew, or had ample warning, that things were not in order, and that at any moment and at any place he was likely to find some article where it did not belong, some portion of the building unfinished, or some place not in a condition justifying heedlessly walking through or about it. * * * The situation of the plaintiff was like that of an employe engaged in the construction or reparation of a building. Everything was in a formative condition, or in a state of transition. The employés and their superiors were each and all engaged in an effort to bring order out of the confusion into which everything had been thrown by reason of the removal of the laboratory and its incidents. The very condition of things admonished each employé that he must not take anything for granted. The rule of duty to furnish a safe place has no application here. The place was as safe as places of this sort, or under such circumstances, usually are. Andre v. Elevator Co., 117 Mich. 560, 563 (76 N. W. 86). * * * It was the duty of all the employés engaged at the new laboratory, under the conditions presented at the time, to take note seasonably of things or conditions which ordinary observation would bring to their attention, and which they could see as well as the master could see them. Hatchways in laboratories and factories are common. They are there for the purpose of utility and convenience. To be used they must be opened. An employé cannot complain of their existence, or of their being left open from time to time, when they are so situated that in broad daylight they will be discovered with .the slightest attention. As well might an employe complain when, through heedlessness, he falls over a box of drugs or a carboy of acid.» He might claim that he was unaware of their presence on a platform, and was not told that they were there. But the master would have the right to assume that he and other employés ¿working with him would use the senses with which nature had endowed them.”'

As applied to the facts of this case, we think this contention cannot be sustained. The platform was not in process of construction. It was apparently completed. It was used for unloading goods, and as a way traveled by the employés. The plaintiff had never been there before. He was not bound to assume that, upon a platform of this character, he would find an open trapdoor. He had no occasion to suppose he was likely to drop into an opening if he did the work he was set to do. Trapdoors are dangerous openings, and, when open, should be properly guarded. See Engel v. Smith, 82 Mich. 1 (46 N. W. 21, 21 Am. St. Rep. 549); Pelton v. Schmidt, 104 Mich. 345 (62 N. W. 552, 53 Am. St. Rep. 462). The case comes within the principle announced in Brown v. Railroad Co., 118 Mich. 205 (76 N. W. 407), where it was said:

“The plaintiff did not know this. He had been but a short time employed on a boat, and was wholly unacquainted with freight boats’, or the custom of leaving the hatchways open on such boats. He was employed as an oiler of engines on the Ann Arbor. He was taken away from his accustomed work, and, if his testimony be-true, put into a dangerous place, without warning ok caution, by one who stood in place of master. It is true that the rule is well settled that the servant assumes all the risks usually incident to his employment, but this rule cannot be invoked in the present case. His usual work, for which he was employed, was that of oiler, and that on another and different kind of boat. He was taken from that work, and put to do work of another kind. Plaintiff had the right to assume that he would not be put in a position of danger in going upon the boat to aid in fitting her out. Harrison v. Railroad Co., 79 Mich. 409 (44 N. W. 1034, 7 L. R. A. 623, 19 Am. St. Rep. 180); Engel v. Smith, 82 Mich. 1 (46 N. W. 21, 21 Am. St. Rep. 549).”

It is urged that, if the record discloses evidence of negligence on the part of any one other than the plaintiff himself, it is that of a fellow-servant, not that of the principal ; that Olschefski was acting as the eyes for himself and plaintiff as well,' and, inasmuch as he saw the trapdoor, it was his duty to warn the plaintiff, and, if he did not, his failure to do so was the intervening cause of the injury, and the defendant is not liable. As before stated, this is not the case of an employé who knew the danger. Plaintiff had never before been on this platform, and did not know of the existence of the trapdoor. The language used in Cone v. Railroad, Co., 81 N. Y. 206 (37 Am. Rep. 491), is instructive:

“As between the plaintiff and the defendant, it was the duty of the latter to furnish its employés, for use in the prosecution of its business, good and suitable machinery, and keep it in repair. Wright v. Railroad Co., 25 N. Y. 562; Laning v. Railroad Co., 49 N. Y. 521 (10 Am. Rep. 417); Flike v. Railroad Co., 53 N. Y. 549 (13 Am. Rep. 545); Corcoran v. Holbrook, 59 N. Y. 519 (17 Am. Rep. 369). It was also its duty to furnish, for the management of such machinery, careful and trustworthy servants ; and, if these conditions were fulfilled, the plaintiff, although'injured by the negligence of his fellow-servant, could maintain no action against their common principal. Wright v. Railroad Co., supra; Coon v. Railroad Co., 5 N. Y. 492. But that is not the case here. The plaintiff was not injured by the negligence of his co-employé while managing good and suitable machinery. The defendant failed to supply machinery of that character. * * * Therefore the defendant’s contention-comes to this: ‘We concede that we failed in our duty. We did not supply a suitable machine. ' But our servant, the engineer, could, notwithstanding, have so managed that the defect should cause no harm.’ If this doctrinéis accepted, it will loosen the rule of responsibility, which now bears none too closely upon corporate conduct. It will seldom happen that unusual care on the part of an engineer would not prevent an accident. In this case he might have opened the cocks or blocked the wheels, or, with extreme care, so separated the engine from its train that the two should occupy separate tracks. It now seems that it would have been well to have done one or the other of these things. His omission to do so may have been negligence towards the defendant, but it does not remove the responsibility which attached to it, to furnish good and suitable machinery, or place it upon a subordinate, whose duty is to be measured by the degree of skill necessary for its management, and who is not called upon to make good the want of corporate care and attention.”

In Grand Trunk R. Co. v. Cummings, 106 U. S. 700 (1 Sup. Ct. 493), it is said:

“In the instruction which was given we find no error. It was, in effect, that, if the negligence of the company contributed to (that is to say, had a share in producing) the injury, the company was liable, even though the negligence of a fellow-servant of Cummings was contributory also. IE the negligence of the company- contributed to, it must necessarily have been an immediate cause of, the accident, and it is no defense that another was likewise guilty of wrong.”

See, also, Ellis v. Railroad Co., 95 N. Y. 546; 7 Am. & Eng. Enc. Law (1st Ed.), p. 828; Town v. Railroad Co., 84 Mich. 214 (47 N. W. 665); Sheltrawn v. Railroad Co., 128 Mich. 669 (87 N. W. 893).

Can it be said that the action of the company in constructing this trapdoor, and leaving it open, in the line which must be traveled by plaintiff if he complied with the direction given by the foreman, without informing him of its existence, or putting a guard about it, did not contribute to his injury ? It cannot be said it did not.

The judgment is affirmed.

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


author: Montgomery, J.

text:
    COUCH v. MINING JOURNAL CO.
    1. Libel — Pleading—Damages.
    In an action for libel by an attorney against a newspaper, testimony that plaintiff’s business fell off in consequence of the publication is admissible under a declaration averring that plaintiff “suffered the loss in his profession of the confidence of his neighbors, friends, clients, and acquaintances.”
    2. Same — Evidence—Injury to Feelings.
    Testimony as to the effect of the publication on plaintiff’s wife is inadmissible to show injury to plaintiff’s feelings, when no such claim is-set out in the declaration.
    3. Retraction oe Libel — Reasonable Time.
    What will amount to a reasonable time under 3 Comp. Laws, § 10425, exempting a publisher from exemplary or punitive damages unless plaintiff shall, before bringing suit, give defendant a reasonable time after demand to publish a retraction, is a question of fact for the jury, unless the circumstances leave no room for a difference of opinion upon the subject.
    4. Reasonable Time — Motive.
    What is a reasonable time, where a question of motive is involved, is a mixed question of law and fact.
    5. Retraction — Construction oe.
    Whether a retraction published in a paper is full and complete, so as to comply with the provisions of 3 Comp. Laws, § 10425, making the same admissible in evidence on the question of the good faith of defendant and in mitigation of damages, is a question for the court.
    Error to Chippewa; Steere, J.
    Submitted January 31, 1902.
    (Docket No. 46.)
    Decided April 8, 1902.
    Case by John A. Couch against the Mining Journal Company, Limited, for libel. From a judgment for plaintiff, defendant brings error.
    Reversed.

      Warner & Sullivan (Clark & Pearl, of counsel), for appellant.

      John P. Conrick and M. F. McDonald, for appellee.
   Montgomery, J.

The plaintiff, who is an attorney at law residing at Sault Ste. Marie, brings this action of libel against the Mining Journal Company, Limited, publisher of a newspaper at Marquette, based upon two alleged libels, both relating to the same matter. For the purposes of the questions involved, it is unnecessary to set forth these libels at length, and we refrain from doing so. Suffice it to say that we have no doubt that the publication set up in the second count was calculated to bring the plaintiff into disrepute in his character as an attorney, and to hold him up to the ridicule and contempt of his neighbors, and was libelous per se, within our former holdings.

On the trial no attempt was made to justify the publication. On the contrary, the evidence introduced shows that on receipt of a request for a retraction, which came to the editor of the Mining Journal at Marquette by mail, and reached him on Saturday or Sunday, he wrote to Mr. Couch, acknowledging the receipt of his demand for retraction, and stating that he would be in Sault Ste. Marie on the following Thursday; that he in fact did visit Sault Ste. Marie on the following Thursday for the purpose of investigating • as to the truth of the statements contained in the libelous article, fully satisfied himself that the article was libelous and did an injustice to Mr. Couch, the plaintiff, and returned to Marquette and published the following retraction :

“Not Warranted by the Facts.
“The editor of the Mining Journal was at Sault Ste. Marie Thursday to make an investigation into the matter of the publication recently made in this paper connecting John A. Couch and Deputy Sheriff W. F. Lipsett, in a discreditable manner, with an alleged attempt to beat a Minneapolis traveling man named Rickert out of a sum of money. The story was given this paper by Rickert. As it was related by him, an attempt was made to use a justice’s court there in an improper manner to force him to give up $50, which was demanded by the justice who issued a warrant for his arrest, by a hackman with whom he had a dispute over the latter’s charge for service rendered, and beat him out of the money, and that both Mr. Couch and the deputy sheriff played a prominent part in the scheme.
“His investigation into the matter has convinced the editor of the'Mining Journal that Mr. Couch was in no manner concerned in the affair. His office is in the same building with that of the justice who issued the warrant, and across a ball from the justice’s room, and he was an onlooker at some of the proceedings. The deputy sheriff, who is a warm friend of Couch’s, thought he saw a chance to throw a little business in his friend’s way, and rather too zealously sought to persuade Rickert to retain Mr. Couch as his attorney. This evidently caused Rickert to believe that both Couch and Lipsett were leagued with the others against, him and led him to make the. misleading statement to this paper which it published.
“The Mining Journal now desires to say that, having convinced itself of the falsity of the statement attributing unworthy motives to Mr. Couch and Mr. Lipsett in connection with this case, through the investigation made as stated, it now fully acquits both of any part in the alleged attempt to beat Rickert out of money. Lipsett acted rather foolishly, in the case, but that is the worst that can be said of him. Both he and Mr. Couch stand well at Sault Ste. Marie, and publishing the statement given it by Rickert, charging them with improper conduct in connection with the trouble he brought on himself at Sault Ste. Marie through his wrangle with the hack driver, the Mining Journal did both a wrong, which it cheerfully repairs by publication of this statement.”

The principal question that the jury had to deal with on the trial, therefore, was the question of damages. The publication of the libel was admitted, a retraction had been made, and it would follow that the plaintiff was entitled to all actual damages; and whether he was entitled to punitory damages would depend upon whether the publication was malicious, and whether the publication of the retraction was made within a reasonable time after demand, and was full and complete.

It is objected that on the trial plaintiff was permitted to testify as to damages occasioned by reason of loss of business. The declaration averred that the plaintiff “suffered the loss in his profession of the confidence of his neighbors, friends, clients, and acquaintances, and had otherwise been greatly injured, to wit,” etc., “to the damage of plaintiff ten thousand dollars.” We think this was sufficient to apprise the defendant of a claim for damages for loss to business, and that testimony that his business fell off in consequence of the publication was admissible. See Weiss v. Whittemore, 28 Mich. 374; Smedley v. Soule, 125 Mich. 192 (84 N. W. 63); Evans v. Harries, 38 Eng. Law & Eq. 347; Bergmann v. Jones, 94 N. Y. 51.

Plaintiff was permitted to testify, against objection, to the effect that this publication had upon his wife. This ' testimony was limited, by instruction, to the injury to the plaintiff’s feelings by reason of the effect of the libel upon his wife. We think this testimony should not have been admitted. It was not specially set out in the declaration, and that is a sufficient reason for exoluding it in the present case. See Hatt v. Evening News Ass’n, 94 Mich. 119 (54 N. W. 766). We express no opinion as to whether this testimony would be competent under finy circumstances.

The defendant contends that the court also erred in refusing to instruct the jury that no exemplary or punitive damages could be recovered. This contention is based upon 3 Comp. Laws, § 10425, which reads:

“No exemplary or punitive damages shall be recovered unless the plaintiff shall, before bringing suit, give notice, by mail or otherwise, to the defendant, to publish a retraction of the libel, and allow the defendant a reasonable time in which to publish such retraction, and make such amends as are reasonable and possible under the circumstances of the case; and proof of the publication or correction shall be admissible in evidence, under the general issue, on the question of the good faith of the defendant, and in mitigation and reduction of exemplary or .punitive damages: Provided, that the retraction shall be published in the same type and in the same editions of the paper as the original libel, and, so far as practicable, in the same position.”

The charge of the circuit judge upon this subject was as follows:

“ On the part of the defense it is claimed that there was not a reasonable time given to investigate and publish the retraction before the suit was brought, and that is a question of fact for you to determine. It is for you to say whether or not, after the article of February 15th was published, and before suit was brought, the defendant was given a reasonable time in which to investigate and publish a retraction, and make such amends as were reasonable and possible under the circumstances. And it is a question of fact for you whether or not the publication (that is, the retraction, as it is called) was a full and complete retraction, such as made amends as fully as possible.”

It is contended that this charge was erroneous in two respects: First, it is said that what was a reasonable time is a question of law; and, second, that the court should have construed the retraction, and determined whether or not it was full and complete.

It is not the rule that what is a reasonable time is always a question of law. Where any question of motive is involved, it is a mixed question of law and fact. See Gridley v. Tobacco Co., 71 Mich. 528 (39 N. W. 754); Michigan State Ins. Co. v. Lewis, 30 Mich. 41. As was said in Druse v. Wheeler, 26 Mich. 189:

“The question of reasonable time may sometimes be peculiarly a proper one for the jury. But when the court can clearly see, from the nature of the case, that the time exceeds any possible term required by convenience or necessity, it should so determine, and so instruct the jury.”

But upon the other ground we think this instruction was erroneous. It would be difficult to imagine a more complete and absolute retraction than that given in the article quoted above. It was in writing, and was for the court to construe. It should not be left for the jury to find that it did not amount to a full retraction.

For the errors pointed out, the judgment will be reversed, and a new trial ordered.

Hooker, C. J., Moore and Grant, JJ., concurred. Long, J., did not sit.


author: Grant, J.

text:
    SHADFORD v. DETROIT, YPSILANTI & ANN ARBOR RAILWAY.
    1. Street Railways — Consolidation.
    A street-railway company formed by the consolidation of other street-railway companies cannot, when sued upon a judgment obtained against one of the consolidating companies, maintain that the consolidation was illegal and void because not authorized by the street-railway statute.
    2. Same — Liability for Debts of Old Companies.
    The organization of a street-railway company for the sole purpose of absorbing all the business and property of other street-railway companies, brought about by the issue of stock and bonds in the new company to the stockholders and bondholders of the old companies to replace their stock and bonds, which are surrendered and canceled, and without the payment of any consideration to the old companies for the transfer of their property, constitutes a consolidation, and not a sale, and makes the new company liable for the debts of the old companies.

    3. Same — Insolvency of Old Companies.
    By a consolidation of two street-railway companies, the new company is burdened with the debts of the old companies, and cannot escape liability on the ground that the old companies were insolvent, and that the creditors have not been prejudiced by the consolidation.
    Error to Washtenaw; Kinne, J.
    Submitted February 18, 1902.
    (Docket No. 19.)
    Decided April 8, 1902.

      Assumpsit by John Sbadford against the Detroit, Ypsilanti & Ann Arbor Bail way to recover the amount of a judgment against the Ann Arbor Street-Bailway Company. From a judgment for plaintiff on verdict directed by the court, defendant brings error.
    Affirmed.

      The Ann Arbor Street-Railway Company was incorporated in August, 1888, to operate a street railway exclusively in the city of Ann Arbor. Its capital stock was $100,000, and soon after its organization it gave a mortgage for $60,000, to secure that amount of bonds, which were sold. The road was built and put in operation. It was not a financial success. January 23, 1893, its barns and some of its rolling stock were burned. It collected an insurance of $10,000, with which it paid one of its debts. The bondholders took possession of the property. It appears to have been .reorganized, and its tracks increased. The reorganized company replaced- the old mortgage by another for $100,000. In September, 1894, one of its employés, engaged in the work of the extension of the road, was injured, brought suit against the company, recovered a judgment, issued an execution, and levied upon all the property of the company. That judgment was reversed by this court January 5, 1897, and a new trial ordered. Shadford v. Ann Arbor St. R. Co., 111 Mich. 390 (69 N. W. 661). On December 17, 1897, he obtained another judgment against the company, upon which he issued execution, which was returned nulla bona. That case was affirmed in this court September 19, 1899. 121 Mich. 224 (80 N. W. 30).
    The Ann Arbor & Ypsilanti Street-Railway Company was organized in 1890, to operate a street railway between the cities of Ypsilanti and Ann Arbor, its western terminus being at the eastern boundary of the city of Ann Arbor. It was operated by steam. Its stock was $100,000; its bonded indebtedness $60,000, secured by a trust mortgage. *
    On July 31, 1896, the Ann Arbor & Ypsilanti Electric Railway Company was organized, with a capital stock of $100,000. In August following, the Ann Arbor & Ypsilanti Street-Railway Company conveyed, by deed and bill of sale, all its property, real and personal, to the Ann Arbor & Ypsilanti Electric Railway Company. This conveyance or transfer was effected in the following manner: All the stockholders of the Ann Arbor & Ypsilanti Street-Railway Company conveyed their stock to the electric company, and the bondholders of the former company also transferred their bonds to the electric company. In compensation for such transfer, the electric company issued to each stockholder of the Ann Arbor & Ypsilanti Street-Railway Company one-half share of the stock in the electric company for each share of stock of the former company; and for each bond in the Ann Arbor & Ypsilanti Street-Railway Company it issued a bond in the electric company. In September following, the Ann Arbor Street-Railway Company also conveyed its property to the Ann Arbor & Ypsilanti Electric Railway Company, and the sole consideration paid for this transfer was the issue of one-half a share in the new company for each share held in the Ann Arbor Company, and the issue of half a bond in the new company for each bond in the Ann Arbor road. The bonds in the Ann Arbor and also of the Ann Arbor & Ypsilanti roads were surrendered an£. canceled, and the Ann Arbor & Ypsilanti Electric Railway Company issued bonds to the amount of $150,000, $110,000 of which were issued to the bondholders of the other two roads. $8,000 more of the bonds were sold to equip the line between Ann Arbor & Ypsilanti (formerly operated by steam) with electric power. The claim of plaintiff and the judgment obtained by him were known to all the parties interested in organizing the electric company, and a bond of indemnity was executed to the electric company against this claim.
    In November, 1897, defendant was organized, and negotiations promptly opened between that company and the Ann Arbor & Ypsilanti Electric Railway Company for either a purchase of, or a consolidation with, that new company. An agreement was soon reached, and was substantially the same as that between the three companies above mentioned. The entire stock and bonds of the electric company were transferred to the defendant, and in lieu thereof the defendant issued to each stockholder of the electric company one share of stock in the defendant for each share in the electric company, and a bond and a half of the defendant company for each bond of the electric company. Many of the stockholders of the electric company were also holders of its bonds. A syndicate of the stockholders of the electric company made a written agreement with the defendant' on December 30, 1897, embodying the above arrangements, and providing for the construction of the road by the defendant from Detroit to connect with the tracks of the electric road at Ypsilanti on or before May 15, 1898. A meeting of the stockholders was called on January 3,1898, for the purpose of carrying out this agreement. What proportion of the stockholders was present I do not find that the record shows, but the following resolution was unanimously adopted:
    “ Whereas, the stockholders of the Ann Arbor & Ypsilanti Electric Railway Company, owning more than a majority of the capital stock, have entered into certain contracts for the sale of the shares of stock owned by them and each of them to the Detroit, Ypsilanti & Ann Arbor Railway, a corporation organized and existing under the street-railway laws of the State of Michigan, which is building and proposes to finish its street-railway from the terminus of the track of the Ann Arbor & Ypsilanti Street Railway, in the city of Ypsilanti,-Michigan, to the city of Detroit, Michigan, at prices and of certain consideration in said contracts specified:
    “ Now, therefore, be it resolved that the board of directors be hereby authorized to sell the whole property, real, personal, and mixed, rights, franchises, and other property of this Ann Arbor & Ypsilanti Electric Railway Company, and to call in all the stock of this corporation, and pay, or cause to be paid, each holder the price such holder is entitled to receive for his stock according to the terms of the contract of sale of said stock to said Detroit, Ypsilanti & Ann Arbor Railway referred to; and the holders of the stock of this corporation who shall neglect or refuse to make contracts of sale with said Detroit, Ypsilanti & Ann Arbor Railway, within ten days from the date hereof, shall receive a pro rata share according to the number of shares held by them and each of them, at the following price, to be paid by the Detroit, Ypsilanti & Ann Arbor Railway, to wit, amounts for the consideration equal to the price to be received by the other stockholders.”
    The arrangement was carried out, and on May 11, 1898, a deed of its real estate and a bill of sale of all its personal property were duly executed by the electric company to the defendant company. The defendant assumed an indebtedness of $16,000 of the electric company, and received from it $32,000 of its bonds, which had been pledged as collateral to that debt. The bond of indemnity which had been executed to the electric company to indemnify it against plaintiff’s claim was transferred to the defendant.
    Plaintiff insists that there was a consolidation (1) between the Ann Arbor Street-Railway Company, the Ann Arbor & Ypsilanti Street-Railway Company, and the Ann Arbor & Ypsilanti Electric Railway Company; and (2) between the Ann Arbor & Ypsilanti Electric Railway Company and the defendant; while the defendant insists that in each case it was not a consolidation, but a purchase.
    The circuit court directed a verdict for the plaintiff.

      Laivrence & Butterfield, for appellant.

      A. J. Sawyer & Son, for appellee.

      As to liability of consolidated railroad companies for debts of their predecessors, see note to Chicago, etc., R. Co. v. Hall, (Ind.) 23 L. R. A. 231.

   Grant, J.

{after stating the facts). The defendant and the several other organized companies involved in this controversy were organized under the tram or street railway acts, and not under the railroad law of the State. It is urged that the acts under which these companies were organized do not authorize a consolidation, and that, therefore, any attempted consolidation would be illegal and void. In this case the conclusive reply to this proposition is that the .defendant is not in position to raise the question. If there was in fact a consolidation between the Ann Arbor Street-Railway Company and the Ann Arbor & Ypsilanti Street-Railway Company and the Ann Arbor & Ypsilanti Electric Railway Company, and between the last company and the defendant, the latter cannot deny its liabilities, either for contracts or torts, or its liability resulting from sucb consolidation, upon the plea that its organization is 'illegal. The legality of its organization cannot be attacked collaterally in suits by and against it, based upon dealings with it. Its legality can be attacked only in a direct proceeding by the State for that purpose. So long as the State chooses to recognize its validity by keeping silence, it is a corporation de facto, though not de jure, and liable the same as any other corporation in its dealings with others. Swartwout v. Railroad Co., 24 Mich. 389, and note; Hall Manfg. Co. v. Railway Supply Co., 48 Mich. 331 (12 N. W. 205); Coe v. Railway Co., 31 N. J. Eq. 105; Washburn v. County of Cass, 3 Dill. 251 (Fed. Cas. No. 17,213); Tarpey v. Salt Co., 5 Utah, 494 (17 Pac. 631); Bell v. Railroad Co., (N. J. Ch.) 10 Atl. 741, and note; Whitney v. Wyman, 101 U. S. 392.

Did the transactions between these companies constitute consolidations or sales ? It is manifest that the Ann Arbor & Ypsilanti Electric Railway Company was organized for the purpose of uniting the two old organizations under one management, or of absorbing them, and taking over to itself all their properties and business. It exercised no other function, and evidently it was not the intention to construct a new road between Ypsilanti and Ann Arbor. It did nothing but to absorb these roads and run them as one. The stockholders, managers, and directors of the old companies were the parties who created and organized the electric company, and who transferred all the stock to the new company. The directors of the two old companies all became stockholders in the new, and most of them as well bondholders. The electric company paid not a dollar to the other companies as compensation for the transfers ' of all their properties to it. The arrangement left the two old companies without assets and without business. They were virtually out of existence by the arrangement. They had not only disposed of all their property, but all the business which they were organized todo. Under defendant’s contention, their creditors had no remedy except by suit in equity to compel the stockholders to pay assessments to the full value of their stock, or to reach the stock and bonds of the electric company which had been received by the stockholders of the old companies, upon the theory that they were assets of those companies. If the stock was fully paid, such proceedings would be valueless. Whether the stock in the electric company, in the hands of the stockholders who had been stockholders in the Ann Arbor Company, could be reached by a proceeding in equity, is a doubtful question, but it is unnecessary to discuss it. We think that the law will not permit such a transaction upon the theory of a sale. Those who managed the transaction evidently thought so too; otherwise they would not have taken the precaution to take a bond from the Ann Arbor Street-Railway Company to indemnify the electric company against the plaintiff’s claim. Every layman knows that by the purchase of property the vendee does not assume the vendor’s debts, and that this rule applies as well to corporations as to individuals. Mr. Beach says:

“The word ‘consolidation’ is used to denote any conjunction or union of the stock, property, or franchises of two or more corporations, whereby the conduct of their affairs is permanently, or for a long period of time, placed under one management, whether the agreement between them be by lease, sale, or other form of contract, and whether its effect be the dissolution of neither of the companies, or whether one of them be dissolved and its existence be merged in the corporate being of the other, or whether it result in the dissolution of both companies, and the creation of a new corporation out of such portions of the original companies as enter into the new.” 1 Beach, Priv. Corp. § 326.

We are of the opinion that each transaction was a consolidation in fact, or, as it is termed in England, an “amalgamation.” The law will not permit the creditors of two corporations to be deprived of the assets of such corporations in payment of their debts, and turn them over to suits in equity against the stockholders, when the union or consolidation with another corporation is effected with■out the passage of a dollar or other valuable consideration between the corporations themselves. The effect here is precisely the same as though the stockholders of the Ann Arbor Street-Railway Company and of the Ann Arbor & Ypsilanti Street-Railway Company had united to form the electric company, and had pooled their stock and bonds into the one company. The purpose and result of both proceedings would have been the same. Chicago, etc., R. Co. v. Ashling, 56 Ill. App. 327; Hurd v. Steam Laundry Co., (Sup.) 60 N. W. Supp. 813. Not a dollar was paid, in either of these consolidations, into the treasury of those companies whose existence was thereby terminated. What we said in Grenell v. Gas Co., 112 Mich. 70 (70 N. W. 413), is equally applicable here:

“A corporation cannot sell all of its property, and take in payment stock in a new corporation, under an arrangement that has the effect of distributing the assets of the vendor among its stockholders, to the exclusion and prejudice of its creditors.”

Even if this were a purchase, it was a purchase under similar circumstances to those in the Grenell Case, wherein we held that the purchase was subject to the rights of ■creditors.

It is also contended that the Ann Arbor Street-Railway Company was insolvent, and that therefore plaintiff was not prejudiced by the consolidation or transfer. The consolidated company cannot raise this question. The question is not whether either of the old companies was solvent or insolvent, or whether both were solvent or insolvent. By the consolidation the new company is burdened with the debts of the old, and the sole question then is, Has the new company sufficient assets to pay its debts, which then include those of the old companies ?

The judgment is affirmed.

Hooker, C. J., Moore and Montgomery, JJ., concurred. Long, J., did not sit.


author: Hooker, C. J. Montgomeby, J.

text:
    NOWAKOWSKI v. DETROIT STOVE WORKS.
    1. Master and Servant — Personal Injury — Duty to Warn of Danger.
    The plaintiff, a boy less than 18 years of age, worked as an apprentice in a foundry for a month at making and filling-molds. On the day of the accident he met a fellow-servant,, who spilled a teaspoonful of molten iron on a damp floor,, causing an explosion that put out plaintiff’s eye. The testimony showed that melted iron always explodes when spilled on a damp floor. In this foundry the spilling of melted iron was a daily occurrence, and the plaintiff had seen it spilled,, but testified that he did not know an explosion of this kind was liable to occur. Held, that defendant was not guilty of negligence in failing to warn the plaintiff of the danger from: an explosion of molten iron. Montgomery, J., dissenting.
    2. Same — Saee Place — Foundries—Wet Floors.
    A foundry that is as safe as any, so far as its general condition is concerned, is not made so unsafe by being used when the floor is damp as to make the owner liable to an employé for an injury caused by molten iron exploding on the wet floor, though in other foundries time is allowed for floors to dry-after sprinkling. Montgomery, J., dissenting.
    3. Same — Ordinary Hazards.
    While a novice is entitled to warning against dangers of an extraordinary character, an employer is not bound to anticipate every possible accident, and warn him against them.
    Error to Wayne; Frazer, J.
    Submitted February 18, 1902.
    (Docket No. 21.)
    Decided April 8, 1902.
    Case by Frank Nowakowski, by next friend, against the Detroit Stove Works, for personal injuries. From a judgment for defendant on verdict directed by the court, plaintiff brings error.
    Affirmed.

      S. F. Griffiths and Lehmann & Riggs, for appellant.

      Byron S. Waite and Charles B. Warren, for appellee,.
   Hooker, C. J.

The plaintiff had worked as an apprentice in a foundry for a month or more, at making and filling molds; a part of his duty being the carrying of melted iron from the cupola to the molds in a ladle. On the day in question he was returning to the cupola, and met a fellow-servant carrying a ladle full of molten iron; •and, as he approached, a teaspoonful was spilled, and, striking upon the damp floor, a portion of it flew up and put out plaintiff’s eye. This action is brought to recover ■damages, and the negligence alleged against the master is “that it failed to provide a safe place to work, and to warn the plaintiff of the danger of explosion of spilled metal, and of the danger of injury therefrom. The evidence shows that this foundry floor was as safe as any, so far as its general condition is concerned. Counsel say that the •place was not safe because the floor was made too damp, •or used too soon after sprinkling, and evidence was •offered to show that other foundries allowed time for their floors to dry after sprinkling. The court directed a verdict for the defendant, and plaintiff has brought error.

We have often held that there is some latitude open to •employers in the selection of machinery and methods; “that the latest and most approved are not required; and while we have held that novices are entitled to instruction and warning as to the use of dangerous machinery, and •against dangers not apparent, there is a limit to this duty. If the testimony is to be believed, melted iron always bursts or explodes and flies when it is spilled upon a wet floor, •and spilling from ladles is of daily occurrence in a foundry. This foundry was no exception, and plaintiff’s own testimony shows that he had seen it spilled, and spilled it himself, but that until he was hurt he did “not know that ■an explosion of this kind was liable to occur.”

It is manifest that no serious injury would be likely to ■occur from the spilling of a teaspoonful of iron, unless a spark happened to strike an eye, which is a remote contingency. It goes without saying that the master was not ■called upon to tell this boy, who had worked a month at the business, that when approaching another, carrying' hot iron, he should turn his back, or get behind a screen, to avoid having his eye put out if his fellow-servant should happen to spill a teaspoonful of iron on the floor. In my opinion, this was not such an extraordinary risk as calls, for the application of the rule laid down in Smith v. Car Works, 60 Mich. 501 (27 N. W. 662, 1 Am. St. Rep. 542), and Ribich v. Smelting Co., 123 Mich. 410 (82 N. W. 279, 48 L. R. A. 649, 81 Am. St. Rep. 215). A master is. not called upon to anticipate every possible accident, and may leave an employe to learn the hazards of a business,, as he learns the business itself, from his associates and experience, where the hazards are not extraordinary. Admittedly, this master was not required'to do more than to say, ‘ ‘ If you spill iron on the floor, it will fly up, and may hurt you,” — if, indeed, more could be asked than a warning that it would fly up. The plaintiff was as much bound to-know that it might hit him in the eye as the defendant was, if he knew or had been warned that it would explode and fly if it fell upon the floor. If this plaintiff had been told that melted iron would explode when spilled, there is not the least reason to suppose that he would have quit his work at the foundry business, or refused to pass a fellow workman when carrying it. The two cases cited were-radically different from this, and both cases were so near the line that members of the court dissented. Both rest upon the principle that a novice is entitled to warning against dangers of extraordinary character, arising in each of those cases from emptying molten metal upon ice by the-injured party, which was certain to subject such person to imminent danger of severe injury or death. In the present case the danger from passing one with a ladle of metal was slight, and the consequences, as a rule, would not be extraordinary if a little metal should be spilled. -

The judgment is affirmed.

Moobe and Gbant, J J., concurred with Hookeb, C. J.

Montgomeby, J.

(dissenting). The testimony offered on behalf of the plaintiff tended to show that he was an apprentice in the molding room of the defendant, less than 18 years of age. He lost the sight of his eye by reason of molten iron being accidentally spilled by a co-employé upon the ground necessarily traversed in carrying it, which molten iron came in contact with water or very damp earth. The plaintiff offered testimony tending to show that the “ mash,” so called, over which the workmen were required to travel, had been sprinkled but a few moments before, and that the mash was damp or wet. There was also testimony tending to show that the' practice in other foundries was to sprinkle several hours before the molding was done, and that, when the iron came in contact with the dry earth, explosions were not likely to occur. The learned circuit judge directed a verdict for defendant, apparently upon the ground that the injury occurred to the plaintiff wholly through the fault of the fellow-servant, Zelinski.

In my opinion, the question of whether the defendant provided a safe place to work, and gave the requisite and proper instructions to this plaintiff, and properly cautioned him against the — to him — unknown danger, was a question for the jury. His testimony shows that he had no knowledge of the danger of an explosion from molten iron coming in contact with the damp earth or with water; ánd the case cannot be distinguished upon principle in this respect from Smith v. Car Works, 60 Mich. 501 (27 N. W. 662, 1 Am. St. Rep. 542). In that case the plaintiff’s intestate was an adult, and yet the court said, speaking through Mr. Justice Sherwood :

“I do not think the court can presume that the common laborer in a foundry or machine shop, such as this was, is possessed of the scientific knowledge necessary to enable him to comprehend and avoid any such danger as overtook Mr. Smith on that icy way, resulting in his death; and I think, before he was called upon to perform the hazardous undertaking by the foreman in charge, he should have been informed somewhat of its dangerous character. This, however, was not done, and there is no pretense that the death of Mr. Smith was not caused by tbe explosion which followed the contact of the molten iron with the water and ice covering the dangerous passage over which the same was required to be carried.”

The only possible difference between the two cases is a difference in the degree of danger. If it is true that the contact of molten iron with water or with damp earth will ■cause an explosion sufficient to result in such a serious injury as the loss of an eye, the duty of giving notice of such danger to an employe can hardly be avoided by noting the difference in degree between such a case and the Smith Case. This case was followed and recognized as authority in Ribich v. Smelting Co., 123 Mich. 401 (82 N. W. 279, 48 L. R. A. 649, 81 Am. St. Rep. 215). Unless these cases are to be overruled, it seems to me clear that there was a question for the jury in the present case.

Long, J., did not sit.


author: Grant,. J.

text:
    OSTRANDER v. CAPITOL INVESTMENT, BUILDING & LOAN ASS’N.
    1. Attorneys in Partnership — Retainer of One Member.
    A retainer of one member of a firm of attorneys is a retainer of the firm, in the absence of an agreement to the contrary.
    2. Same — Contract for Individual Services.
    A contract for the services of one member of a firm of attorneys individually is legal, and such member can sue alone upon it; and, although the other members may assist him, they cannot recover for services so rendered, unless there is an express agreement to do so.
    3. Same — Formation of Partnership After Retainer.
    An attorney who contracts with a party to perforin certain legal services at an annual salary, and who, before the end of the year, enters into a partnership with another attorney, may sue in his own name to recover the salary, though his partner may have assisted in performing the services.

      4 Same; — Yearly Service — Discharge—Instructions.
    The court charged the jury that if they should find that plaintiff was personally retained for annual periods at a stated salary, and entered upon and performed his duties for over two months of the last year, and was then discharged, and defendant continued to use his name as general counsel upon its letterheads, and publish him to the world as such, for the remainder of the year, then plaintiff could recover his salary for that year. Held, that the reference to the continued use of plaintiff’s name on the letterheads was not prejudicial error, as the jury could not have been misled by the fact that defendant used the letterheads it had on hand without erasing the plaintiff’s name.
    Error to Ingham; Wiest, J.
    Submitted February 19, 1902.
    (Docket No. 62.)
    Decided April 8, 1902.

      Assumpsit by Russell C. Ostrander against the Capitol Investment, Building & Loan Association on a contract of employment. From a judgment for plaintiff, defendant brings error.
    Affirmed.
    For some time prior to April 5, 1890, plaintiff and Mr. Edward Cahill formed the law partnership of Cahill & •Ostrander, with offices at Lansing. At that date Mr. Cahill was appointed a Justice of the Supreme Court, which appointment and acceptance terminated ipso facto the partnership, and it was formally dissolved on April 8th. Plaintiff continued the business thereafter in his own name and on his account until the 1st day of January, 1891, when Mr. Cahill retired from the bench, and he and plaintiff again entered into partnership in the practice of the law. They continued in partnership until July 15, 1898, when they dissolved. On March 11, 1890, the •defendant was organized, with offices in Lansing, officers ■chosen, and Mr. Cahill appointed its general counsel. Plaintiff was not informed, and had no knowledge, of this appointment. Mr. Cahill had made no arrangements for compensation, and there was at that time little, if anything, to do. Mr. Cahill performed no services for which he made any charge. There was, therefore, no occasion to inform Mr. Ostrander of Mr. Cahill’s appointment. Soon after his appointment as justice of this court, Mr. Cahill formally presented his resignation to the defendant, and it was accepted.
    About June 1, 1890, plaintiff, after talking with the officers of the defendant, and inquiring into its business, made an agreement to perform all legal services for it for one year from June 1, 1890, for $250 and disbursements,, and expenses for travel outside of the city of Lansing. He performed those services, and was paid. In 1891,, 1892, and 1893 plaintiff asked for increases in salary, which were granted. In 1895 he asked for another increase, but this was refused. Defendant’s records showed by appropriate resolution the appointment of plaintiff as its general counsel. In its' sworn statements,' filed with the secretary of State, it gave his name as such. Upon its letterheads and other documents it printed his. name as such from 1890 up to the time of his discharge by it, on August 18, 1898. All written communications made by it to him, and by him to it, were in the name of plaintiff as its general counsel and attorney. He did the most of its legal business. In his absence or sickness Mr. Cahill acted in his stead in. giving advice and doing whatever was required. He gave some opinions, signing them, however, in the name of the plaintiff in all instances except one, which he signed in the firm name. When suits were brought they were brought in the name of the firm. By agreement between plaintiff and Mr. Cahill all income from the business was divided equally between them. Mr. Ostrander was at one time city attorney, and his salary was divided. In 1891 Mr. Cahill was elected a director of defendant, continued as such until after plaintiff’s discharge, and received a salary as such. Plaintiff knew nothing of the resolutions passed by the directors in regard to his appointment. He dealt with the officers of the company, who had the undoubted authority to employ counsel. That such counsel was necessary is admitted. On June 30,1891, the association voted to retain plaintiff .as counsel for the year beginning June 1, at a salary of $300. Mr. Cahill testified that he was at that time asked by some of the directors if the employment of plaintiff would also give the association the benefit of his (Mr. Cahill’s) advice, to which he replied that it would. Of this conversation plaintiff had no knowledge. Bills for the services of plaintiff were presented in his own name, and paid to him, or to some one for him, by the defendant.
    Plaintiff brought this suit, claiming that he was lawfully employed for a year from June 1, 1898, to June 1, 1899. Upon receiving notice of his discharge he promptly notified the company that he would claim employment for the year, and was ready to perform the services contracted for, and would hold the defendant liable. The defendant paid him for his services up to August 18, 1898, at the usual annual salary. There was submitted to the jury one question of fact, viz., “Was the employment of general counsel by the defendant at all times the employment of Russell C. Ostrander, and not of the firm of Cahill & Ostrander?” To which the jury answered, “Yes,” and found a verdict for the plaintiff on the basis of annual hire.

      Gahill & Wood, for appellant.

      Richard A. Montgomery, for appellee.
   Grant,. J.

(after stating the facts). The principles of law applicable to this case are not in dispute, — in fact, are virtually conceded. They are: (1) A retainer of one member of a firm of attorneys is a retainer of the firm, in the absence of an agreement to the contrary; (2) a party may personally contract with one member of the firm for his legal services, and where such contract is proved it will be sustained. The same authorities that establish the first rule also recognize the second. Mechem, Partn. § 195; Smith v. Brittenham, 109 Ill. 540; Harris v. Pearce, 5 Ill. App. 622; Williams v. More, 63 Cal. 50. It follows that a personal contract with one member of the firm forbids the other member from employment against the client of his partner. The law would not permit the members of the firm to be employed on opposite sides of the same suit. When attorneys in partnership permit one member of their firm to make personal contracts for his services, it is upon the implied condition that the other members cannot be employed against their partner’s client. They may assist him, but they cannot oppose him. The other members of the firm cannot recover for services rendered in such case to their partner’s personal client, unless there is an express agreement to do so. The presumption is that such partner has made satisfactory arrangements with his partners, either for a division of his compensation, or that he has given them some other valuable consideration for services which they have agreed he may thus render. The agreement between Mr. Cahill and Mr. Ostrander illustrates what is usual in such cases. All the earnings of the two, whether for services rendered as partners or as individuals, were equally divided between them.

The main contention is one of fact, counsel for defendant insisting that Mr. Ostrander’s employment was, as a matter of fact, the employment of the firm, and was so understood by all parties. If Mr. Cahill had been a member of the firm when plaintiff was employed, this contention would undoubtedly be true. But he was not, and this, in our judgment, changes entirely the aspect of the case. The contract of employment was made with plaintiff alone, and when Mr. Cahill was not only not connected with the plaintiff, but had no interest whatever in the firm. Did the relation between the plaintiff and the defendant change when Mr. Ostrander took Mr. Cahill in as a partner ? If so, then the firm, and not plaintiff alone, were the counsel for the defendant from the 1st of January, 1891. Mr. Ostrander could not change his relation to the defendant without its consent; neither could the defendant change such relation without his consent. A mutual agreement to change the relation was essential. What Mr. Cahill said to the directors when the resolution was passed employing Mr. Ostrander for one year could not operate to change the relation unless both parties knew and assented to it. If the directors had desired to have the firm appear as their general counsel, it could just as well have been done by inserting the firm name, instead of continuing the relation which had theretofore existed with Mr. Ostrander. What the reasons for not doing so were do not appear, and are immaterial. The fact is it did deal with him as its general counsel, advertised him as such, communicated with him as such, and finally discharged him as such, employing and paying him for a little over a month after the partnership was dissolved. To the case made by plaintiff’s evidence defendant replies by evidence that Mr. Cahill informed the directors that they would receive the benefit of his services as well as those of Mr. Ostrander, and by the fact that they did consult him on various occasions, and that the firm name was used when suits at law were begun. A fact was involved. It is true there was but little dispute in the testimony upon which the finding of fact must rest, and whether legally it shows a separate employment of plaintiff, instead of the firm, we need not determine. The court left the question of fact to the jury, and they have settled it. We think there was evidence to sustain their conclusion. A. B., an attorney, has a contract with a railroad corporation to perform its legal services, and also has a general practice. He takes in a partner. Is his contract with the railroad company at ag,end ? Is the contract with the railroad company changed to a contract with the firm ? It seems to us that these questions must be answered in the negative, in the absence of some agreement or understanding to'the contrary. How the new firm divides up the income from their practice concerns no one but themselves. It would be very natural for the attorney to say to the railroad corporation, “In my absence my partner will give you any legal advice, or conduct any suits you desire him to do in the firm name. ” But this fact would not change the personal relations between the company and the attorney. That is precisely this case. Mr. Cahill, when Mr. Ostrander was city attorney, would undoubtedly have given the city any advice in the absence or sickness of Mr. Ostrander. Mr. Ostrander, when employed, might have said to the city, “You can have the benefit of Mr. Cahill’s advice and services as well as mine;” but this would not make Mr. Cahill one of the city attorneys, although it had frequently taken his advice, and-the firm had appeared in suits on behalf of the city.

The court instructed the jury as follows:

“I charge you that if, as a matter of fact, the plaintiff, personally, was employed by the defendant, as is claimed by the plaintiff, for annual periods, and at a stated annual salary or sum, from the 1st day of June, 1890, to and including the 1st day of June, 1898, and if, beginning the 1st- day of June, 1898, he entered upon the performance of his duties of general counsel for the defendant, and performed the required services until on or about the 18th of August, and was then discharged by the defendant, the defendant thereafter continuing to use his name upon its letterheads and literature as general counsel, and to publish him to the world as such, during the remainder of the year, then the plaintiff is entitled to recover in this case the sum of $864.”

Error is assigned upon that part of the above instruction referring to the use of plaintiff’s name as general counsel upon the letterheads and literature of the defendant after his discharge. Plaintiff’s name was not printed on any new letterheads or literature after his discharge, bub his name was not erased from those whereon it had been previously printed. It is true that the use of his name in this manner after his discharge did not tend to prove the personal contract. Its use before that time was legitimate for that purpose. It was of no consequence that his name was not erased'from the literature they had on hand and which they afterwards used. Able counsel tried the case, and it is fair to assume that the matter was fully explained by them to the jury. A jury of intelli•gence could hardly be misled or prejudiced by the fact that defendant used letterheads, etc., which it had on hand, without erasing the name of Mr. Ostrander, after he had been discharged. We think this error not of sufficient importance to justify a reversal of the case.

The judgment is affirmed.

Hooker, C. J., and Moore, J., concurred. Long and Montgomery, JJ., did not sit.